Johannesburg, 08 Jun 2007
Avaya announced on Monday 4 June that it has entered into a definitive merger agreement with Silver Lake, the leading investment firm focused on large-scale investments in technology-driven growth industries, and TPG Capital, a leading private investment partnership, for approximately $8.2 billion or $17.50 per common share.
Under the terms of the agreement, Avaya shareholders will receive $17.50 in cash for each share of Avaya common stock they hold, representing a premium of approximately 28% over Avaya's closing share price of $13.67 on 25 May 2007, the last trading day prior to published reports regarding a potential transaction, and a premium of approximately 33% over Avaya's average closing share price of $13.17 during the 30 trading days ending 25 May 2007.
"After an extensive review of Avaya's strategic alternatives with Avaya management and our financial advisors, the board of directors of Avaya determined that this transaction with Silver Lake and TPG provides the best value for Avaya's shareholders," said Phil Odeen, non-executive chairman of Avaya's board of directors.
Avaya's board of directors has approved the merger agreement and resolved to recommend that Avaya shareholders adopt the agreement.
"In addition to delivering compelling value for our shareholders, the partnership with Silver Lake and TPG also creates clear value for Avaya employees and customers," said Louis J D'Ambrosio, president and CEO of Avaya.
"The investment in our people and technology and the operating structure will enable us to extend our technology and services leadership and continue to deliver the 'gold standard' of communication solutions in the industry."
"Our interests are aligned with the long-term interests of Avaya's customers and employees," said David Roux, a co-founder and managing director of Silver Lake. "We have full confidence in Avaya's excellent management to build on the company's remarkable technology and history, which spans more than a century, to deploy advanced IP communications solutions as a source of competitive advantage for customers."
"As one of the earliest private investors in technology and telecommunications, TPG has come to know and admire Avaya for its roster of leading customers, history of product innovation and commitment to customer service," said John Marren, a partner of TPG. "We look forward to working with our partners at Silver Lake and the company's excellent team to continue to build this exciting franchise."
The transaction is expected to be completed in the US Autumn of 2007, subject to receipt of shareholder approval and customary regulatory approvals, as well as satisfaction of other customary closing conditions. There is no financing condition to the obligations of the private equity group to consummate the transaction, and equity and debt commitments for the merger consideration have been received.
The merger agreement provides for Avaya to solicit proposals from third parties during the next 50 days. In addition, the company may, at any time, subject to the terms of the agreement, respond to unsolicited proposals. There can be no assurance that this process will result in an alternative transaction. Avaya does not intend to disclose developments with respect to the solicitation process unless, and until, its board of directors has made a decision.
Credit Suisse is serving as exclusive financial advisor to Avaya and its board of directors.
Weil, Gotshal & Manges acted as legal advisor to Avaya in connection with the transaction. Skadden, Arps, Slate, Meagher & Flom acted as legal advisor to Avaya's board in connection with the transaction.
Citi and Morgan Stanley acted as financial advisors to Silver Lake and TPG and have committed, together with JPMorgan, to provide debt financing for the transaction.
Ropes & Gray is acting as legal advisor to Silver Lake and TPG.
About the transaction
In connection with the proposed merger, Avaya will file a proxy statement with the Securities and Exchange Commission. Investors and security holders are advised to read the proxy statement when it becomes available, because it will contain important information.
Investors and security holders may obtain a free copy of the proxy statement (when available) and other documents filed by Avaya at the Securities and Exchange Commission's Web site at http://www.sec.gov.
The proxy statement and such other documents may also be obtained for free from Avaya by directing such request to Avaya, 211 Mt Airy Road, Basking Ridge, NJ 07960, for attention: Investor Relations; Telephone: 908-953-7501.
Avaya and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its shareholders in connection with the proposed merger.
Information concerning the interests of Avaya's participants in the solicitation is set forth in Avaya's proxy statements and annual reports on Form 10-K, previously filed with the Securities and Exchange Commission, and in the proxy statement relating to the merger when it becomes available.
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