Avaya, owned by Silver Lake and TPG, has submitted the high bid of $475 million to buy a business unit of bankrupt Canadian telecom equipment maker Nortel Networks.
Avaya is the stalking horse bidder for the business and other parties could try to outbid the company in bankruptcy court. The deal requires the approval of bankruptcy court in Delaware and the Ontario Superior Court of Justice.
The business, called enterprise solutions, makes telephone systems for companies. Nortel has another stalking horse agreement for $650 million with wireless equipment maker Nokia Siemens Networks for the purchase of Nortel's wireless technologies business.
MatlinPatterson, a creditor of Nortel, recently said it was seeking partners for a rescue plan of Nortel, according to the Financial Times.
Avaya, which sells telecom equipment, was acquired by Silver Lake and TPG in 2007 in deal valued at $8.2 billion. At the time, the private equity firms staved off competing bids for Avaya from Cisco and, ironically, Nortel.
Avaya spun out of Lucent Technologies in 2000 and for a time, buyout firm Warburg Pincus was the company’s largest shareholder.