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Private equity-backed Nortel’s network assets sell for $769m

23 Nov 2009

The optical networking and carrier ethernet assets of private-equity backed Canadian telecommunications firm Nortel have sold to Ciena Corporation for $769m, according to reports. The network communications company beat out a bid from Nokia Siemens, who had teamed with private equity firm One Equity Partners, in an auction that ran over the weekend.

One of Nortel’s largest creditors is distressed asset specialist MatlinPatterson Global Advisors, who reportedly held around ten per cent of the company’s debt. The company filed for bankruptcy protection in January, with assets gradually being sold off in a series of auctions.

Ciena’s offer reportedly consists of $530m in cash and $239 in convertible notes, valuing the Nortel assets at 0.8 time annual sales. It is an ambitious acquisition for the company, more than doubling its turnover.

Nokia Siemens, another major player in the auction, confirmed that it had lost out, saying confirmed that its bid had not been successful, saying that its final offer “represented fair value for the assets, and further bidding could not be financially justified.”

Nortel Enterprise Solutions division to communications firm Avaya in a $915m bankruptcy auction.
Last month, communications group Avaya acquired its Nortel Enterprise Solutions unit for $915m. The bid included $900m in proceeds to Nortel and $15m for an employee retention program.

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