Avaya has entered into an asset purchase agreement with Extreme Networks for the sale of its Networking business for approximately $100m. Extreme will serve as the primary bidder in a section 363 sale under the Bankruptcy Code. Other interested parties have an opportunity to bid 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.
Kevin Kennedy, Avaya's CEO, stated: "Several months ago, in the context of optimising 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.
"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 UC and contact centre solutions.
"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."
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 30th, 2017, the end of Avaya's fiscal third quarter 2017, subject to regulatory approvals and other customary closing conditions.