Genband Snaps Up Carrier Business

By Mark Evans | Published: February 24, 2010

The carrier VoIP business must be in rough shape or Nortel’s carrier VoIP isn’t doing that well after it appeared that no one else other than Genband was interested in the business.

In a press release, Nortel said today that Genband has acquired the business for US$182-million after taking into account “balance sheet and other adjustments” worth US$100-million. Genband made a “stalking horse” bid in December for the business.

The absence of another bidder to compete against Genband is pretty ironic given Nortel issued an update recently crowing about how its stalking horse process had attraction sales of more than $1-billion over the original bids.

The sale is subject to court approvals in the U.S. and Canada, which Nortel will seek at a joint hearing on March 3, 2010, and in Israel. Nortel will work diligently with GENBAND to close the sale in the second quarter of 2010, subject to the timing of regulatory approvals.

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  • bankrupt_bob

    One more broken rung in the ladder to oblivion.

  • exNTII

    20% of the 800 million revenue. what a garage sale.

  • NT Still Here

    I just hope Genband (The equity firm) is smart and doesn't only listen to what they hear from the execs who are just looking out for there job! They need to poll some of the worker bee's who have been around for 20yrs +. While many may be angry with the past 10 yrs of garbage they have endured they do have value to add!.

    Most if not all of the director levels and up in the CVAS org is all new…. they are making horrible decisions already and its not too much of a surprise considering they have been in their roles for all of 6 months. Some are new to CVAS as a whole and don't understand the carrier mentality!

    Hopefully the Nortel executive life boat saving will stop with the new company! This garbage of putting non-qualified directors and execs in roles just because they are 'friends' or know someone needs to stop if this company will ever turn the corner!

  • DinRaleigh

    Anyone know about Genband Holdiay Schedule, vacation and benefits?

  • legalrobbery

    Unbelievable…never could anyone imagine the crown jewels of Nortel being tossed away like common rubbish for a few pennies. It is absolutely stunning. It is amazing that the robbery will continue to goes on until the last dime is spent.

    Friends, I would like to pray for anyone that has been displaced and hope for your journey to follow with a company that values its employees, and second, my hope endures for those that are left in CVAS. I hope that you all make a successful transition to Genband.

    A word of the wise for the leaders at Genband. You will fail if you continue to entertain any of the Nortel senior leadership that is left. There is no warning greater than this. All Nortel senior leadership must be cast into the lake of fire. You must cut the head off of this demon once and for all and run a company based on innovation, and integrity and not on thievery.

    Good Luck CVAS comrades

  • exNTII

    a world where execs are honest and look out for their employees does not exist. this used to be the case when exaggerated salaries, bonuses and greed were not part of the package. nothing can be changed and this has nothing to do with Nortel. it is an executive norm be it small startup or large conglomerate or large investment banks. ever read about CEOs burning up venture capital like there was no tomorrow or the Home Depot CEO for getting hundreds of millions or Merryl Lynch / AIG handing out millions in bonuses even though they were begging for bailout cash just a year ago.

    worker ants do not bite and will always get swatted because there are a ton of replacements readily available to be stomped on.

  • cvasSux

    Cvas management are complete idiots. From president down to d levels. They did everything possible to save their own asses and did not consider anyone, making false promises to employees during the split of the company this summer then to only lay people off in the hundreds round after round leading to this cvas sale…if cvas was indeed the crown jewel and profitable, why all the cuts ? Especially after they were 'forcing' people left and right into cvas cause they 'needed' them ?
    For me, the sake price and the buyer is the icing on the cake…I could not be happier!
    I hope this group of unorganized, hypocrite buffoons get what they all deserve!

  • cvasSux

    NB: I just feel bad for the good people that were left there and wish them luck with genband or any new oportunities they take

  • MikeZ_ElPresidente

    Oh how the mighty have fallen. The hype of cvas being number one and the best thing since sliced bread , has been finally exposed for a what it is … propaganda.

    Reality is its a crap product based on the old legacy platforms, held back by overcomplexity and hard to troubleshoot….wake up folks ….this is no iPhone.

    Now just sit back and watch the carrier customers run for cover and management squeeze staff to breaking point as they try to impress their new task masters.

  • techorama

    Wow….it's lucky Nortel paid all those executive bonuses to ensure that the creditors received maximum value from the sell off….imagine how little it would have gone for if there hadn't been $450M paid out in bonuses.

  • OzNortel

    While the price is bad for creditors there could be positives for employees.

    1. The low price means CVAS wont become a heavy chain around Genbands neck. Remember its the billion type acquisitions that sank Nortel.

    2. Less money to creditors = more money left to power the new business

    3. Surely working in a profitable company is better than in Ch11-land

    4. Hopefully we will finally shed all the 6sigma rubbish and mantra from the Zafirovski years.

    5. True watershed of all the dead wood. Only those that contribute stay on.

    6. Reinvigorate careers…I mean where is your career going in Nortel.????

    7. From (6) better opportunity to get a better new job elsewhere.

  • wasthere

    Exactly, all this wait for this ! Bonuses to keep employees ….what a joke ! This CVAS garage sale should have happened a year ago and the highly paid execs gone with the garage stuff. Nortel creditors must be even worst …..a bunch of morons to let that scam go on in front of them.

  • exNTII

    I doubt genband is profitable. it only makes 145 million. with 475 employees, if you take away cost of revenue and 100K per employee, it means running razor thin. with 2500 employees more no chain around the neck but a huge anchor on the foot. expect cost cutting with jobs moving offshore to continue.

  • Nortel watcher

    NT still there,

    I had heard the same thing…that the director level and higher are folks that came from other divisions like Enterprise and Wireless or even sub-departments like Business Strategy, etc. who benefitted from friends higher up throwing them a lifeline into CVAS…what I don't understand is why these folks didn't think their fortunes would have been better with the winning bidder in the earlier auctions. I guess it was safer to stay in Nortel until the end than chance a pink slip because you weren't “in-scope”

    Well, there's always NBS to jump to if anyone thinks they won't be in-scope at Genband

  • ntpurgatory

    Ding dong the witch is dead! Wait, there is still LG-Nortel, NETAS JV, and the MSS (Passport) to sell along with the patents. Well, regardless, the SS Nortanic is close to the ocean floor. Stunning how cheap GSM and CVAS were sold for. Bargains…

  • legalrobbery

    OzNortel… you fail to mention the most important thing and this centers around the current Nortel management structure that will transition over to Genband or for that matter any senior ranking management team member that has migrated to Avaya, Cienna, etc… Surely how can the points that you mention hold water? We can certainly offer well wishes for our comrades, but until those that have contributed to the demolotion of Nortel have humbled themselves, there continuation to serve these new companies threatens any portion of there viability. This is pure fact. As mentioned previously, Genband's survival is based on the absolute termination of any Nortel leadership.

    I would like to see what you are saying occur, but the resignation or termination of key leadership individuals must take place immediately. There is no other alternative.

  • lamarmotte71

    OzNortel = Peter A. – let go of it mate, your bukkake on this board should be rated against minors. :D

  • less

    Everyones so darn down on that Nortel management structure…

  • exNTII

    who wants this garbage

  • horace_grimswold

    Are you a glass half-empty, or a glass 75% empty kind of dude? What's wrong with you?

    Everybody in the world wants a Nortel management job. GE'ers, McKinsey'ers, and Nortel'ers alike flock to such prestigious positions.

    All positive returns, no downside.

    Declining sales? who cares?

    Bankrupt? who cares?

    Thinking about leaving for greener pastures? Nortel has a KEIP bonus for you.

    Thinking about leaving for greener pastures…one year later? Nortel has another KEIP bonus for you.

    Where did Nortel get the inspiration for its management compensation? Read all about it:
    http://www.city-data.com/states/North-Carolina-…

  • exNTII

    wrong. they were probably found out early that they were not in scope for the other auctions and so they moved. these people are not the planning in advance type. too much agonizing work for their cobwebbed neurons.

  • protosphere

    “There is no warning greater than this. All Nortel senior leadership must be cast into the lake of fire. You must cut the head off of this demon once and for all and run a company based on innovation, and integrity and not on thievery. “

    Amen brother… well said.

    And no finer exemplified than Avaya who took green failed Hackney (for god knows why! Or any reasons we may not publicly know /profoundly astounding) as Avaya picks up the fallen corrupt torch to boast that there is no better time to buy Nortel after bankruptcy and how 90% of top 500 fortune companies do, etc… maintaining the traditional misleading like their energy tax campaigns, they won't fold with bankruptcy pro Binning on board after so many insider only CFOs, 3 to 5 year turnarounds or$20 buying opportunity, blaming global factors for their decline amid unreliable numbers extended repair, playing musical chairs with product groups while deferring revenues, etc…

    endless, as they pay bonuses throughout from keeping fraud bonuses that got them into this mess to still paying after looting the corpse and still asking for more… bonuses bonuses bonuses by ultimatum masters of deceit and delay with an army of powerful lawyers paid to defy their consciences

    ….with plenty more insurance against lawsuits who's premiums get paid first too, like their bonuses and legal fees looting the corpse

    182-100= looks good on them!
    What over a billion BS? So
    much for the bonuses on this first time in history Ch 7 dressed in Ch11 clothing by a company who's demise followed the largest fraud settlement in Canadian history.

  • protosphere

    You aware Manley defends Dunn, Hackney got a golden transfer, and they still want bonuses….right?

  • protosphere

    An they have the audacity to boast how they lead in VoIP in the very same press release… shameless

  • TongueInCheek

    Come on Proto, everyone clearly understands that Manley IS NOT Dunn's lawyer, so no need to fabricate BS on that.

    Even if Manley still works at the same law firm, he works from a completely different office (Ottawa v. Toronto) and there is the Client-Attorney Priviledges in place.

  • protosphere

    Everyone (here anyways) knows John Manley is a senior partner in the law firm who defends Frank Dunn. How can you call this BS by splitting hairs on the profound matter.

    Do you think readers do not understand what I meant or that Manley would argue with an office he is a senior partner, to do right thing? Strikes me as obvious and a conflict of interest.

    Here is a Nortel board member's law firm defending a fired CEO that is charged with criminal fraud and you argue that client attorney privilege have anything to do with the weather.

    I have never fabricated over the years to mislead with intent than present the facts as I best know them and have I been wrong?

  • protosphere

    What did you expect him to say as a senior partner, here is a case I can't get involved with and don't tell me anything about it? ha!

    And was Dunn's direction to his lawyer, don't tell your senior partner about it because he is a Nortel board member and I am suing his company for wrongful dismissal? ha!

    It stinks TongeInCheeks… why neglect the overwhelming tyranny.

  • MikeZ_ElPresidente

    Whos Peter A? anyway , Genband deal is bad news for employees and customers. This is a dodgy dtartup that will screw employees over and over and over. That Vogt dude is a tool…just wait and see

  • wasthere

    If this business was so profitable and #1 like advertised why did creditors(at least one is a big investment firm : Mattlin Patterson) let it go for such a low price(sold at 20% of sales) ?

  • less

    Well, you're defending Dunn and Manley here, too…

  • less

    lol – I got stuck contemplating your first sentence because it instantaneously begat visions of the tricks of levitating glass, ladies, and, invariably, NT stock.

    It appears that Nortel holds a few leviataion patents which is why management, well, hangs around. Whats their new old, motto – Lazarus, come forth!

  • freqmgr

    No, he should have said here is a case the firm cannot be involved in. Period. No matter how high the fees.

  • TongueInCheek

    If this is such a concern for you, then I encourage you to file a formal complaint with the Law Society of Upper Canada. They are the regulators for the Ontario legal community and are required to investigate complaints.

    It is also very interesting to do a lawyer search for John Manley on the McCarthy Tetrault website. The results are fascinating.

  • whopperscan

    Such a small amount…. and not one other bid. Quite sad.
    So, is that it? Nothing left to flog off now?
    I guess Nortel's JV's are likewise almost value-less now. LG-Nortel, GDNT (once a capable manufacturer), is it even open any more? Netas in Turkey.
    What of Nortel facilities? Acres and floors of long-empty buildings and land.
    Does anyone have any news on the NBS empire build?

    Whatever happens, I Believe in administrators and lawyers solid committment – they WILL drag this out for another year or so, as long as there is cash to be extracted in fees. :-) )

  • Zhacknightmare

    Shame Buffett didnt get Z's job;

    http://www.msnbc.msn.com/id/35627335/ns/busines…

    Oddly Z thinks he still should be rewarded for this debacle and Hackney is still there !!

    The shareholders and employees suffer….

    Does Buffett use Six Sigma, I bet not.

  • whopperscan

    Such a small amount…. and not one other bid. Quite sad.
    So, is that it? Nothing left to flog off now?
    I guess Nortel's JV's are likewise almost value-less now. LG-Nortel, GDNT (once a capable manufacturer), is it even open any more? Netas in Turkey.
    What of Nortel facilities? Acres and floors of long-empty buildings and land.
    Does anyone have any news on the NBS empire build?

    Whatever happens, I Believe in administrators and lawyers solid committment – they WILL drag this out for another year or so, as long as there is cash to be extracted in fees. :-) )

  • Zhacknightmare

    Shame Buffett didnt get Z's job;

    http://www.msnbc.msn.com/id/35627335/ns/busines…

    Oddly Z thinks he still should be rewarded for this debacle and Hackney is still there !!

    The shareholders and employees suffer….

    Does Buffett use Six Sigma, I bet not.

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