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Oracle reportedly held buyout talks with Avaya

  • Reuters reports Avaya, a top provider of telecom hardware/software for enterprises and contact centers, held buyout talks with Oracle (ORCL) earlier this year. However, the talks are said to have "fizzled" in recent months.
  • Avaya was taken private by P-E firms TPG and Silver Lake for $8.4B in '07. The company has been struggling to deal with market saturation, competition from the likes of Cisco and Microsoft, and an industry shift towards hosted/cloud-based telecom services (RingCentral's IPO drives home the strength of that trend).
  • Avaya's sales fell 7% Y/Y to $5.17B in FY12, and 8% to $1.15B in its most recent quarter. Thanks to its P-E owners, Avaya had $6.1B in debt at the end of March '13, and just $303M in cash. The company filed for an IPO back in 2011, but its plans have been on hold ever since.
  • Buying Avaya would dramatically expand Oracle's enterprise hardware ops, which are contending with revenue declines of their own.
Comments (4)
  • The Street Fighters
    , contributor
    Comments (7) | Send Message
     
    They need to buy it to boost their networking portfolio, Oracle lagged behind rivals in terms of technology, skills and portfolio. Buying Avaya enable the company to enter the networking space and compete with the big players.
    4 Oct 2013, 08:43 PM Reply Like
  • jhesr
    , contributor
    Comments (350) | Send Message
     
    Its interesting to see Oracle potentially going further into networking. The Acme Packet and Tekelec acquisitions were surprising but I guess Oracle sees it as a growth opportunity.
    5 Oct 2013, 12:20 AM Reply Like
  • fireengine
    , contributor
    Comment (1) | Send Message
     
    SUN had a networking division for TOR Ethernet Switches and InfiniBand, which Oracle acquired from the Sun acquisition. Oracle also acquired Xsigo 2 years ago, which gives them a really nice Network Virtualization capability for SPARC and x86, to compliment the Solaris vNic technology. Basically, Oracle owns the complete stack of hardware and software to offer solutions that nobody else can do.
    5 Oct 2013, 11:50 AM Reply Like
  • Dnetis
    , contributor
    Comment (1) | Send Message
     
    They (oracle) should exit the hardware business entirely, including Sun hardware. Admitedly, it's going to be difficult to do a 180 since their engineered systems strategy is all about building a complete stack. So far that strategy had a mixed success. Avaya's contact center and IP telephony software has some value but the shift to the cloud puts a wrench in it as well and for that sole reason combining it with networking hardware to build a stack seems like a flawed strategy.
    10 Oct 2013, 07:33 AM Reply Like
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