Avaya Formally Files For $1 Billion IPO, The re-IPO Trend Continues (ALU)

Banking, finance, and taxes

Published: June 9, 2011 4:14 pm

Last Updated: June 10, 2011 5:49 am

Avaya Inc. is going to soon be public again. After being taken private during the private equity peak it has now filed for its initial public offering. No terms were disclosed but the offering is initially for as much as $1 billion in common stock. We currently do not have a proposed ticker or details on whether it will trade on the NYSE or NASDAQ.

Avaya offers its customers next-generation business collaboration and communications solutions via unified communications, real-time video collaboration, contact centers, data communications, and applications. As of March 31, 2011, the company claimed to have more than 400,000 customers, including more than 85% of the Fortune 500 companies and one million customer locations worldwide.

For the twelve months ended September 30, 2010 and the six months ended March 31, 2011, Avaya generated revenue of $5.06 billion and $2.756 billion, respectively. For the twelve months ended September 30, 2010, product revenue was 51% of the total revenue and services represented 49%. For the six months ended March 31, 2011, product revenue was 54% of total revenue and services was 46%. About 55% of all revenue was generated in the United States. For the twelve months ended September 30, 2010 and the six months ended March 31, 2011, Avaya had a net loss of $871 million and $612 million, respectively, and Adjusted EBITDA of $795 million and $442 million, respectively.

The underwriting group is massive. Book-runners are Morgan Stanley, Goldman Sachs, and J.P. Morgan. Other underwriters and co-managers are listed aS Citi, Deutsche Bank, BofA/Merrill Lynch, Barclays Capital, UBS, and Credit Suisse.

The company plans to use the proceeds of the initial public offering to repay debt, to redeem preferred shares, and to pay certain amounts in connection with the termination of its management services agreement.

We did indicate that Avaya is a “re-IPO” and that is what it is. Funds and affiliates of both TPG and Silver Lake are the owners. Those private equity firms bought Avaya in 2007 for some $8.3 billion during the private equity boom.

Avaya goes all the way back to the old Lucent days long before Alcatel bought the troubled Lucent to become Alcatel-Lucent SA (NYSE: ALU). The company also won the Nortel Enterprise auction for $900 million back in late-2009. Avaya’s full S-1 filing is here.

JON C. OGG

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