Midmarket, Sales and marketing

Avaya Call Center Software Division Sale: Deal or No Deal?

Clayton, Dubilier & Rice (CD&R) is having trouble closing a multibillion-dollar acquisition of Avaya's call center business, according to the New York Post. But a company spokesperson hinted that Avaya will share updates on its credit and financial situation later this month.

Updated Jan 19, 2017: Avaya Files for Chapter 11 Bankruptcy Protection 

Rumors about the Avaya division's pending sale have been swirling since at least November 2016. Some pundits think Avaya needs the deal to replenish its coffers and potentially stave off a chapter 11 bankruptcy filing. Company retirees also worry a company collapse could crush Avaya's pension plans. An Avaya VP recently downplayed the company's debt load, however, insisting that the situation was manageable.

Still, Avaya's business status could depend on that call center business sale to CD&R. Veritas Capital also is said to be a potential bidder. According to The New York Post: "The pending deal calls for CD&R to buy the call-center software business, with the proceeds going to Avaya, which would then restructure the remaining business in a prepackaged bankruptcy." But the situation is "very, very fluid" according to the report.

An Avaya spokesperson told the paper that ongoing, constructive discussions with creditors continue -- with "further developments" expected later this month.

TPG Capital and Silver Lake Partners acquired Avaya for $8.2 billion in 2007. The networking and collaboration company has struggled, however, as customers shifted to cloud and subscription services. Avaya was further squeezed by Cisco's enterprise alternatives.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.