Avaya is working through its Chapter 11 bankruptcy protection and is now beginning to sell off its assets. The first asset to go is Avaya's IP networking business, with Extreme Networking bidding $100 million for the business unit.
"After extensive evaluation, we believe that a sale of our Networking business is the best path forward for all stakeholders," Kevin Kennedy, president and CEO of Avaya, said in a statement. " It provides a clear and positive path for our Networking customers and partners and enables the Company to focus on its core, industry-leading Unified Communications and Contact Center solutions. "
Avaya filed for bankruptcy protection on Jan. 19 of this year as the company struggled to manage its debt load.
Avaya Acquisition Not Yet a Done Deal
The IP networking business sale to Extreme Networks is not a done deal by any measure.
Under Chapter 11 Bankruptcy protection, Avaya's sale is governed by the United States Bankruptcy Code. As such, other companies may submit a bid for the IP networking assets as part of an asset auction. In any event, the sale of Avaya's IP networking business will close on or before June 30, 2017, either to Extreme or to whomever emerges as the highest bidder.
"The possibility of Avaya Networking being part of a pure-play networking company like Extreme Networks would allow greater opportunities for its products and services to thrive and the industry to continue to benefit from our award-winning wired, WLAN and Fabric technology," Kennedy said.
Avaya originally acquired its IP Networking assets from Nortel Networks for $900 million in Dec. 2009. Nortel was also operating under bankruptcy protection at the time, with a similar auction process in place. Avaya had originally bid $475 million to acquire Nortel's networking business but had to increase its bid as part of the auction process.
Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.