Avaya could buy Nortel Enterprise Solutions

Nortel Networks' Enterprise Solutions business is likely to be sold to Avaya for $475m (£288m), the companies announced on Monday.

The deal marks the latest sale of a Nortel division, following the Canadian networking firm's Chapter 11 bankruptcy proceedings, announced at the start of the year. The most recent such sale, of Nortel's CDMA and LTE access business to Nokia Siemens, was announced on 22 June.

Avaya, like Nokia Siemens, has been designated as a "stalking horse" bidder. This is a mechanism sometimes employed in major bankruptcy-related sales, whereby a named bidder puts forward a certain amount in order to block very low bids — if that bidder is outbid, they get compensation for their trouble.

"We have determined that the sale of our businesses maximizes value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible," Nortel chief executive Mike Zafirovski said in a statement. "The many customers I have spoken with have been highly supportive of our efforts and transparency throughout this process. They value our employees and technology platforms and are appreciative of our service levels which are at multi-year highs."

Joel Hackney, the head of Nortel Enterprise Solutions, said the successful buyer would "gain access to an industry-leading portfolio that is optimized for real-time communications, bringing speed and simplicity to customers' network environments and allowing them to enhance collaboration, streamline business processes and improve productivity".

Analyst Henry Dewing, from Forrester Research, said in a statement that the deal "puts Avaya ahead of Cisco for enterprise voice sales and enters them into the networking business".