Market Overview

Avaya Expands International Communications Offerings with RADVISION Acquisition


Avaya will expand its global communications network through the acquisition of RADVISION (Nasdaq: RVSN) for a cash value of $11.85 per share, or about $230 million.

RADVISION closed yesterday at $11.20 and had reached $11.75 in pre-market trade Thursday morning. The $11.85 offer is about 57% higher than the average closing price for the 90 trading days ended March 14, according to a press release posted to Tel-Aviv, Israel-based RADVISION's website this morning. The company's video infrastructure, including video conferencing products, will be added to Avaya's communications platform.

“With this acquisition we will seek to extend videoconferencing to any device, anytime, anywhere, making it as easy as a phone call, seizing the opportunity to deliver a fully-integrated solution and architecture that we believe sets us apart from the competition,” Avaya President and Chief Executive Officer Kevin Kennedy said in the press release.

Telecommunications spending was predicted to increase last year for the first time since 2009 according to research firm Yankee Group. The company said expenditures will reach $302.2 billion in 2014 from $275.7 billion in 2011.

Silver Lake and TPG Capital-owned Avaya filed for a $1 billion Initial Public Offering in June. It delayed the offering amid market concerns making investors wary of new companies. The IPO is expected to be offered as soon as April. Avaya was spun off Lucent Technologies in 2000 and was acquired for $8.2 billion in 2007.

The RADVISION acquisition will also help Basking Ridge, New Jersey-based Avaya expand outside of the United States. North American operators were expected to decrease capital expenditures by 3% in 2011, the only region which had an estimated decrease in spending last year. Avaya acquired Richardson, Texas-based communications provider Sipera Systems in October 2011 to increase communication security. Terms of that deal were undisclosed.

The RADVISION acquisition, which is expected to be completed in 90 days, is still subject to shareholder approval. Holders of about one third of RADVISION's outstanding shares have already committed to the deal. Avaya will not need additional financing for the acquisition.

Posted-In: AvayaNews M&A Tech Best of Benzinga


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