In light of the Wall Street Journal reporting that Nortel may be interested in buying Avaya, UBS Securities said the possibility of a Nortel-Avaya deal “would be consistent with Nortel’s strategy of increasing focus on enterprise and professional services” but that it would involve high integration risks. In a research report, UBS analyst Nikos Theosopoulos said buying Avaya would give Nortel 30% of the enterprise voice market, as well as more scale in the services business. He also believes it would be accretive based on a price of $16.50 a share and $200-million in operating synergies. “Synergy targets may be larger than $200-million but we take a conservative view given integration risk, large product overlap and large services component at Avaya”.
UBS’ Take on the Avaya Rumours
In light of the Wall Street Journal reporting that Nortel may be interested in buying Avaya, UBS Securities said the possibility of a Nortel-Avaya deal “would be consistent with Nortel’s strategy of increasing focus on enterprise and professional services” but that it would involve high integration risks. In a research report, UBS analyst Nikos Theosopoulos said buying Avaya would give Nortel 30% of the enterprise voice market, as well as more scale in the services business. He also believes it would be accretive based on a price of $16.50 a share and $200-million in operating synergies. “Synergy targets may be larger than $200-million but we take a conservative view given integration risk, large product overlap and large services component at Avaya”.