Is Avaya Pursuing RingCentral Instead of Selling Up?
The latest on Avaya's future
Last week, we commented on the marketplace for Avaya, the leading communications brand that appeared to be considering acquisition options to create a new home for itself in the current UC market. Now, it seems as though Avaya may be considering investing with a joint venture with communications and collaboration brand, RingCentral.
According to recent reports from Bloomberg, Avaya is on the cusp of abandoning any plans to sell the company, focusing instead on a new partnership with a similar market leader. Avaya has been exploring strategic opportunities for continued growth for a while now and has held conversations with private equity firms in the process. This includes discussions with Searchlight Capital, the company that owns Mitel Networks.
Avaya has said that it “needs more time” to study the strategic options available to it in the current marketplace. Although a decision was expected by the middle of September, “advanced talks” are ongoing.
Are RingCentral and Avaya Joining Forces?
At this stage, there is very little information available about a potential merger for RingCentral and Avaya. It’s possible that Avaya could push forward with a new strategy to regain its strength in the market with the benefits that a forward-thinking brand like RingCentral has to offer. On the other hand, it’s also possible that these discussions could fall through entirely.
Avaya refuses to provide many details about its plans going forward, or the state of the conversations that it is having with acquirers and investors. Although we know that the discussions are “advanced” -that’s about all that we know. However, Avaya has said that it’s working hard to get to a conclusion in the process as quickly as possible.
These new announcements come at a time when Avaya has been facing some significant turmoil in the financial markets. The Avaya stocks fell by a level of 11.6% at 9:32 am in the New York Trading exchange, to a value of about $1.3 billion – marking the biggest reduction since May. On the other hand, RingCentral is seeing fantastic growth of around 5.1%, up to a market value of $10.8 billion.
Advanced Talks Continue
Avaya first announced its “advanced” talks with various parties in the middle of August this year and said that it would be bringing its decision to a conclusion within 30 days. However, it’s unlikely that we’re going to see a decision today.
According to Avaya, there can’t be any “assurances” regarding the timing of any actions going forward for the brand. Additionally, Avaya notes that there’s no guarantee that the review process will lead to a specific outcome. Further updates will be available when a decision is made…
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