Avaya Holdings is considering a leveraged buyout offer from a private equity firm that values it at more than $5 billion, including debt, Reuters reported.
Avaya emerged from bankruptcy protection 15 months ago. Avaya was sold to private equity firms TPG Capital and Silver Lake for $8.3 billion in 2007.
Avaya’s board of directors is evaluating an offer from a private equity firm that values it at more than $20 per share. Avaya shares ended on Friday at $13.21, giving it a market capitalization of $1.5 billion. The company also had $3.2 billion in debt as of the end of December.
The Reuters report did not reveal the identity of the private equity firm making the offer for Avaya.
Based in Santa Clara, California, Avaya is one of the world’s largest providers of telephony systems. Avaya, which competes with Microsoft and Cisco Systems, is trying to boost its business of providing communications software to companies, as its hardware business became more commoditized. It has also been seeking to broaden its offerings of cloud-based communications solutions.
Software and services accounted for 83 percent of Avaya’s revenue of $738 million in the three months to the end of December. Avaya’s operating income was $50 million, up from $38 million a year ago.
Avaya’s contact center business has also attracted acquisition interest from private equity firms, including Clayton Dubilier & Rice, Hellman & Friedman and Permira Advisers. Hellman & Friedman and Permira own Genesys Telecommunications Laboratories, a U.S. provider of call center software.