Avaya Is Said to Plan $1 Billion IPO for as Soon as April

Feb. 16 (Bloomberg) -- Avaya Holdings Corp. (AVYA), the communications-gear maker owned by private-equity firms Silver Lake and TPG Capital, plans to hold its initial public offering as soon as April, two people with knowledge of the matter said.

The company, based in Basking Ridge, New Jersey, filed in June to raise $1 billion in an IPO. It put off the sale amid stock-market swings that left some investors reluctant to buy shares in newly minted companies, said the people, who asked not to be identified. The timing could slip, the people said.

Cisco Systems Inc. (CSCO), the top manufacturer of networking equipment and a competitor to Avaya, slumped 11 percent last year, while rival Juniper Networks Inc. (JNPR) dropped 45 percent. The weakness reflected concerns that customers would delay upgrades amid economic turmoil. The outlook brightened in recent weeks after quarterly results from Cisco exceeded profit and sales estimates and analysts predicted that AT&T Inc., the largest U.S. telephone company, would step up capital spending.

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.

Market Share

Synergy Research Group said in August that Avaya gained share in the global market for voice equipment for corporate customers. It ranks No. 2 in the market behind Cisco.

Telecommunications capital spending began increasing last year for the first time since 2009, according to Yankee Group. The research firm said last May that global expenditures will rise to $302.2 billion in 2014 from $275.7 billion in 2011.

Stacey Torman, a representative of Avaya, declined to comment.

AT&T, based in Dallas, is planning to make “reasonably healthy” orders from networking companies this year, Jefferies Group Inc. said in report yesterday.

Avaya was spun off from Lucent Technologies Inc. in 2000 and taken private in 2007 for $8.2 billion. Later, it acquired an equipment business from Nortel Networks Corp. for $943 million.

Morgan Stanley (MS), Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) are leading the IPO, Avaya said in its June 9 filing with the U.S. Securities and Exchange Commission. The company didn’t disclose how many shares it will sell or give a price range in the filing.

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

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

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