Santa Clara, Calif. – March 7, 2017—Avaya Inc. (“the Company”) today announced it has entered into an asset purchase agreement with Extreme Networks, Inc. (Nasdaq: EXTR) (“Extreme”) under which Extreme will serve as the primary bidder in a section 363 sale under the Bankruptcy Code to acquire Avaya’s Networking business for a transaction value of approximately $100 million, subject to adjustments.
“Several months ago, in the context of optimizing our capital structure, we announced that we were conducting a comprehensive assessment of the various alternatives available to us, including expressions of interest in certain Avaya assets,” said Kevin Kennedy, president and CEO of Avaya. “After extensive evaluation, we believe that a sale of our Networking business is the best path forward for all stakeholders. 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. Today’s announcement furthers our overall restructuring goals as we position the rest of Avaya for long-term success.”
Kennedy continued, “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.”
The sale process will be administered by the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) and governed by the United States Bankruptcy Code. Other interested parties will be provided the opportunity to submit bids prior to a deadline set by the Bankruptcy Court. If other qualified bids are submitted, an auction process will be conducted, in which the agreement with Extreme would set the floor value for the auction. Approval of a final sale to either Extreme or a competing bidder is expected to take place shortly after completion of an auction. The transaction is expected to close by June 30, 2017, the end of Avaya’s fiscal third quarter 2017, subject to regulatory approvals and other customary closing conditions.
Avaya enables the mission critical, real-time communication applications of the world’s most important operations. As the global leader in delivering superior communications experiences, Avaya provides the most complete portfolio of software and services for contact center and unified communications with integrated, secure networking— offered on premises, in the cloud or a hybrid. Today’s digital world requires some form of communications enablement, and no other company is better positioned to do this than Avaya. For more information visit www.avaya.com.
Cautionary Note Regarding the Company’s Currently Pending Chapter 11 Cases
On January 19, 2017, the Company (together with certain of its domestic subsidiaries and its parent) filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. As such, the Company’s security holders are cautioned that trading in securities of the Company during the pendency of the Company’s currently pending Chapter 11 cases will be highly speculative and will pose substantial risks. It is possible some or all of the Company’s currently outstanding securities may be cancelled and extinguished upon confirmation of a restructuring plan by the Bankruptcy Court. In such an event, the Company’s security holders would not be entitled to receive or retain any cash, securities or other property on account of their cancelled securities. Trading prices for the Company’s securities may bear little or no relation to actual recovery, if any, by holders thereof in the Company’s Chapter 11 cases. Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities.
Cautionary Note Regarding Forward-Looking Statements
This document contains certain forward-looking statements. These statements may be identified by the use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," “our vision,” "plan," "potential," "preliminary," "predict," "should," "will," or “would” or the negative thereof or other variations thereof or other comparable terminology and include, but are not limited to, statements regarding the Company’s expected motions to be filed in the Chapter 11 proceeding and the dispositions of such motions, and statements regarding the 363 sale and auction process. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control, including, but not limited to: the actions and decisions of our creditors and other third parties with interests in the Chapter 11 cases; our ability to maintain liquidity to fund our operations during the Chapter 11 cases; our ability to obtain Bankruptcy Court approvals in connection with the Chapter 11 cases, including without limitation necessary approvals in connection with the Networking 363 auction and sale process; our ability to consummate any transactions, including without limitation the potential sale of the Networking business, once approved by the Bankruptcy Court and the time to consummation of such transactions; and other factors affecting the Company detailed from time to time in the Company’s filings with the SEC that are available at www.sec.gov. These and other important factors may cause our actual results, performance, or achievements to differ materially from any future results, performance, or achievements expressed or implied by these forward-looking statements. For a list and description of such risks and uncertainties, please refer to Avaya's filings with the SEC that are available at www.sec.gov and in particular, our 2015 Form 10-K filed with the SEC on November 23, 2015. We caution you that the list of important factors included in our SEC filings may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this document may not in fact occur. Avaya disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law.
John Christiansen / David Isaacs / Leah Polito