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Local Tech Wire

RESEARCH TRIANGLE PARK, N.C. – will purchase Voice over Internet Protocol business unit for $282 million, the companies announced Wednesday morning.

An auction had been planned for this week similar to other actions through which Nortel has sold off most of its businesses, but no other bids were made. Genband had been declared the “stalking horse” in the bidding process after offering Nortel $282 million in December. Had there been an auction, Genband would have had the right to top other offers.

Some Nortel workers in the VoIP and Application Solutions group known as CVAS will lose their jobs.

“A significant majority of CVAS employees will have the opportunity to continue employment with Genband,” Nortel said in a statement. “This includes those employees assigned to the CVAS business in certain [Europe, Middle East, Africa] jurisdictions who will transfer automatically to Genband by operation of law.”

Nortel is liquidating most of its assets after having filed for bankruptcy last year.

Genband is based in Texas.

After what Nortel called balance sheet and other “adjustments,” the net purchase price is $182 million.

The agreement also calls for “substantially all” of Nortel’s customer contracts serviced by the VoIP group to be transferred to Genband.

Approval is still required by bankruptcy courts in the U.S. and Canada and Israel as well as regulatory approval in Europe. The deal has already received regulatory approval in the U.S. and Canada.

"This move will put GENBAND in a unique position to cost-effectively transform today’s legacy switching infrastructure for customers around the world,” said Genband Chief Executive Officer Charles Vogt.

The companies said they expect the deal to close in the second quarter.

"Uniting our two businesses will create one of the industry’s strongest Carrier VoIP players, in terms of market share, customer base and portfolio," said Samih Elhage, president of the Nortel business group. "Joining forces with Genband will allow us to continue to provide a highly reliable solution and service offering to service providers and enterprises across the globe. I am also pleased that a significant majority of Nortel’s employees, who have been an integral part of our long-standing No. 1 position in the Carrier VoIP market, will have the opportunity to continue their innovative work with Genband."