Avaya Plunks Down $370 Million For Tenovis

Avaya said Tuesday that as part of the transaction with affiliates of Kohlberg Kravis Roberts and Co. it will also assume about $265 million in debt. Since Tenovis is expected to have $115 million in cash at closing, Avaya's cash outlay is to be about $255 million, Avaya said.

The transaction is subject to regulatory approvals and closing conditions.

The company had no timeline for closing, an Avaya spokeswoman said. However, the company said it expects its 2005 results to include about nine months of Tenovis results. Avaya's fiscal year began Friday.

"The acquisition of Tenovis significantly enhances Avaya's size and scale in Europe, and is a major step in Avaya's plan to grow its business globally," Avaya chairman and CEO Donald K. Peterson said.

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With Tenovis, Avaya said it expects international revenues will account for about 40 percent of its total revenues, up from 25 percent now, while European revenues would more than double, from about 12 percent to about 30 percent of Avaya's global business.

When fully integrated, Avaya expects Tenovis will add about $1 billion dollars in annual revenue. Avaya had revenues of about $4 billion over the past year.

On Monday, Avaya completed the acquisition of Spectel, a European audio and Web conferencing services company, for about $103 million in cash. That deal, announced in August, allows Avaya to combine its conferencing offers with those of Spectel, which is based in Dublin, Ireland.

Basking Ridge-based Avaya, a Lucent Technologies spinoff, designs, builds and manages communications networks for more than 1 million businesses worldwide. It has about 15,000 employees.

Tenovis, headquartered in Frankfurt, Germany, has more than 5,400 employees and offices in eight nations.

In trading Tuesday morning, Avaya shares were off 1 cent at $13.96 on the New York Stock Exchange.