IPO no longer Avaya's plan, explores sale - sources
Three people who were familiar with the decision told Reuters that the private equity owners of Avaya Inc would be exploring a possible sale of the company instead of a public listing. The sources also said Silver Lake and TPG Capital LP had talks with Oracle Corp in the first six months of this year, but had broken down later in the last few months. The two private equity firms purchased Avaya back in 2007 for USD8.4 billion.
Avaya attempted to proceed with their plan for an initial public offering back in 2011. However, the company's concerns on convincing prospective investors about the growth potential of the Avaya had prompted the technology giant to discontinue its plans for an IPO.
Avaya had been facing stiff competition from companies like ShoreTel Inc and Cisco Systems Inc. Its 2012 revenue of USD5.17 bllion was a 7% decrease from the previous year, and its adjusted earnings for that year were flat. The company's 2013 third quarter revenue was down 8% from the same period a year ago at USD1.15 billion. It has since then struggled to make its stock appealing to investors.
In the Deutsche Bank Leveraged Finance conference this week, Avaya's corporate treasurer Matt Booher had said about the company's IPO plans, "Everyone is very focused on managing the business, and the things we can control in the business to put ourselves in the right position to be in that gate, if you will, or that position."