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Mergers and Acquistions News

Categories: Hardware

August 27th 2010, 15:44PM

Nortel Networks Corporation has announced that it will sell its multi service switch business (MSS) to Marlin Equity Partners and Samnite Technologies for $39 million (£25 million) in cash.

The Canadian communications specialist will enter into a "stalking horse" asset sale with PSP Holding LLC, a specially-created body wholly backed with funding from Marlin and Samnite.

The firm is looking for divestment opportunities in order to pay back its considerable debts.

Commenting on the deal, John Luszczek, general manager of Nortel's MSS business, said: "Today's announcement is welcome news to all MSS customers, suppliers, partners and employees. The proposed transaction represents a clear and positive step forward and is a testament of our continued commitment to innovation and customer support that resulted in the creation of the business value evident by today's announcement."

A "stalking horse" bid is used by a bankrupt company (Nortel filed for bankruptcy protection last year) to chose an interested firm to set a bidding marker. Once that standard has been set, other interested offers can't go under it. In essence it guarantees a certain level of return from divestment.
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