Nortel: Carrier VoIP Officially on the Block

Dec.24.09 | About: Nortel Networks (NRTLQ)

As the first anniversary of Nortel’s (OTC:NRTLQ) bankruptcy protection filing comes over the horizon, the company is seeking court approval to sell its carrier VoIP business to Genband Inc. for $282-million, which has submitted a “stalking horse bid”.

Genband, which was not among the speculated buyers for the business, will receive financing from One Equity Partners to do the deal. OEP manages investments and commitments for JP Morgan Chase & Co. (NYSE:JPM) in private equity transactions.

These agreements include the planned sale of substantially all assets of the CVAS business globally including softswitching, gateways and SIP applications, as well as all patents and intellectual property that are predominantly used in the CVAS business.

There will likely be other bids for the carrier VoIP business. Among the potential bidders are Nokia Siemens Networks (NOK, SI) and Sonus.

With the carrier VoIP business on the block, the two big assets left within Nortel are its 50.1% stake in Nortel-LG, which LG (OTC:LGERF) will probably purchase after exercising a first-right-of-refusal option, and the 3,000+ patent portfolio, which includes the much-wanted LTE patents.