Nortel Networks has entered into an agreement to sell its Carrier VoIP (Voice over IP) and Application Solutions business to Genband for US$282 million, it said on Wednesday.
Just like previous deals for its assets, Nortel has entered into a so-called stalking horse agreement, which means that the $282 million is an initial bid for the VoIP assets. Other companies can in an upcoming auction also decide to bid on the assets, Nortel said in a statement.
In January, Nortel hopes to seek court approvals for the bidding procedures, including a bid deadline and tentative auction date.
Genband has teamed up with One Equity Partners to secure the financing, according to the statement.
Nortel's Carrier VoIP and Application Solutions business and Genband is a good fit because they are already partners, according to an open letter from Charlie Vogt, Genband's CEO, to Nortel employees. The new company would combine Nortel's carrier VoIP and softswitch expertise with Genband's IP gateway portfolio, he said.
The carrier VoIP market has seen a tumultuous year but has begun to stabilize, Infonetics wrote in a research note earlier this month. However, Infonetics still expects about a 30 percent drop in worldwide revenue compared to 2008.
Nortel filed for bankruptcy protection in January, and has since June sold off its wireless, metro Ethernet and enterprise businesses.