Bloomberg News

Avaya Said to Delay IPO on Concern Over Tepid Demand

March 29, 2012

(Corrects reference to Reuters report in second paragraph.)

Avaya Holdings Corp. (W:US), the communications-gear maker owned by private-equity firms, is delaying its initial public offering on concern the sale may meet with tepid demand, a person with knowledge of the matter said.

The sale, previously planned for as early as April, won’t happen until later this year, said the person, who asked not to be identified because the deliberations are private. Reuters reported previously that the IPO may not happen until 2013.

Avaya, owned by Silver Lake and TPG Capital, filed in June to raise $1 billion in an IPO. It might have found itself vying for investors’ attention with other companies, including Facebook Inc. and Carlyle Group LP, which have filed to go public. Facebook, which intends to raise $5 billion in the largest-ever Internet IPO, is targeting an early May sale, a person with knowledge of the matter said this week.

Avaya put off its IPO last year amid stock-market swings that left some investors reluctant to buy shares in newly minted companies. Cisco Systems Inc. (CSCO:US), the top manufacturer of networking equipment and a competitor to Avaya, slumped 11 percent in 2011, while rival Juniper Networks Inc. (JNPR:US)dropped (JNPR:US) 45 percent. The weakness reflected concerns that customers would delay networking upgrades amid economic turmoil.

Avaya Inc., which is owned by Avaya Holdings, reported on Feb. 13 that its fourth-quarter net loss narrowed to $26 million from $180 million a year earlier, while sales rose 1.5 percent to $1.39 billion. The company cut costs in fiscal 2011 by eliminating jobs and consolidating facilities.

Avaya Inc. is also growing through acquisitions. It’s buying RadVision Ltd., an Israeli maker of videoconferencing systems, for about $230 million, RadVision said on March 15.

To contact the reporter on this story: Olga Kharif in Portland, Oregon, at okharif@bloomberg.net.

To contact the editor responsible for this story: Thomas Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • W
    (Wayfair Inc)
    • $24.4 USD
    • -0.66
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  • CSCO
    (Cisco Systems Inc)
    • $24.08 USD
    • -0.02
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