Ailing Nortel Networks has announced it is to sell its carrier VoIP and application solutions (CVAS) business to IP gateway solution provider Genband for $292 million.
As with other parts of its business Nortel has entered into a stalking horse sale agreement with Genband, which means other companies can enter the bidding process at a later stage.
The proposed agreement will see Nortel’s softswitching, gateways and SIP applications, including all patents and intellectual property, said the firm.
In order to finance the deal, Genband has teamed with one of its existing shareholders, One Equity Partners III. Nortel said it expects to seek US. and Canadian court approvals for bidding procedures, including a bid deadline and tentative auction date, in early January.
"The proposed transaction represents a clear and positive step forward for Nortel's CVAS customers, employees, and business. Today's announcement is a strong endorsement of our continued leadership in the Carrier VoIP market where we have held the #1 position since 2002," said Samih Elhage, president of Nortel's CVAS business.
“Today's news is also a testament to our employees, whose commitment to innovation and customer support has ensured our growth in market share in 2009 despite a challenging economy."
Nortel is fast running out of parts of its business to sell. Since filing for bankruptcy nearly a year ago it has sold off its wireless, metro Ethernet and enterprise businesses.