Nortel News: Nortel’s U.S. Government Momentum, Missing the M&A Boat?

| About: Nortel Networks (NT)

Nortel’s U.S. Government Momentum

Is the U.S. government starting to look at Nortel (NT) in a new, favorable way?

It could be in light of the fact Nortel has won a $39-million contract to provide more program management services to U.S. Citizenship and Immigration Services over the next four years. This is expected to help make USCIS more flexible and cost-effective in carrying out its mandate by augmenting USCIS staff with highly-skilled program management specialists.

Two decades of providing IT management and support services to this and other Homeland Security agencies have given us a wealth of legacy knowledge and experience that helps us to support their critical missions,” said Chuck Saffell, who heads up Nortel Government Solutions. “We are very pleased USCIS has chosen to expand our supporting role with them.

It might also help that Mike Zafirovski was nominated last month by President Bush to sit on the National Security Telecommunications Advisory Committee.

Missing the M&A Boat?

Tech Confidential Blog wonders whether it’s too late for Nortel to get involved the M&A sweepstakes despite Nortel CEO Mike Zafirovski’s contention the company is extremely interested in making a deal.

TCB cites a comment in a recent research report by UBS analyst Nikos Theodosopoulos, who suggests:

The need and/or desire on Nortel’s part for M&A to accelerate growth and gain scale in a tightening credit environment pose further challenges.

The question facing Zafirovski is probably whether to make a major acquisition to jump-start revenue or to make a smaller, strategic deal to enhance a particular business such as Wi-Max. Unless Nortel goes after someone such as Tellabs or 3Com, a smaller deal probably looks more do-able.

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