Avaya announced Thursday that it has reached an agreement to purchase virtually all assets of Expanets, a network systems integrator that ranked 68th on this year's VARBusiness 500 ranking of top solution providers.
Basking Ridge, N.J.-based Avaya said it will acquire "substantially all assets" of Expanets, a network systems integrator owned by NorthWestern, for $152 million in cash, less certain working capital adjustments and liabilities. The move strengthens Avaya's services business, as Expanets is one of the largest Avaya VARs in the United States. as achieved Avaya's Platinum partner designation earlier this year and dedicated more than 600 salespeople to its extended Avaya alliance. The network and telecom equipment vendor says the deal will help it improve sales and service support as well as expand Expanet's small and midsize business.
While Avaya grows its services footprint, the acquisition marks another exit for a troubled systems integrator: NorthWestern filed for Chapter 11 reorganization last month, and although Expanets wasn't included in the filing, the solution provider's sales have plummeted lately; Expanets' revenue fell more than 31 percent in 2002. The solution provider had engaged Bear, Stearns & Co. to conduct an auction of the Expanets business, which was held Wednesday in New York. The final bid by Avaya was approved by Expanets, and NorthWestern consented to the transaction.
NorthWestern, an electricity and natural gas company, last month signed an agreement to sell Expanets to Cerberus Capital Management and TenX Capital Management for $107.5 in cash, but apparently the deal with the two investment firms fell through.
"We believe the sale of Expanets will be beneficial for Expanets' ongoing business, clients, manufacturing partners and employees," said Chris Younger, president of Expanets, in a press statement. "Expanets will continue to serve our clients and work with our manufacturing partners seamlessly and without interruption."
Avaya said it expects the acquisition to close within 30 days, depending on regulatory approvals.