Telecom
equipments and solutions provider Alcatel-Lucent has decided not to sell its
enterprise business.
“We
have now positively concluded our evaluation of strategic options for both our
Enterprise and Genesys businesses. Permira’s intended acquisition of Genesys would
enable this profitable business to flourish further. With Enterprise, we have
reached the conclusion that retaining it and strengthening it further serves
Alcatel-Lucent and our customers’ best,” said Ben Verwaayen, CEO of
Alcatel-Lucent.
chosen direction is to leverage the natural connections that exist between
enterprise and carrier customers, and proactively apply Enterprise’s strengths
and momentum in unified communications and data networking with them,”
Verwaayen added.
Genesys
and Enterprise would continue to enjoy a strong commercial relationship, with a
joint development agreement and the two businesses continuing to have access to
each other’s product portfolios. Genesys is widely recognized as one of the
world’s leading providers of customer service software and contact center
solutions.
The
decision to retain the enterprise business comes at a time when the Chinese
equipment major Huawei is flexing its muscle in the enterprise business.
IN
July 2011, Alcatel-Lucent announced that it is exploring strategic options to enhance the future opportunities of
its Enterprise business. All options are being explored including discussions
with third parties. In conjunction with this ongoing review, and in application
of local legal requirements, Alcatel-Lucent held meetings with employee
representatives of its Enterprise business.
Alcatel-Lucent is now considering enterprise as a thrust area and will strengthen the
business.
Enterprise
business spending on IT and telecom services – cloud computing, wireless,
wireline voice, wireline data, and business IP/VoIP – is expected to increase
by six percent in 2011, according to In-Stat.
Prospective
buyers including Avaya, Cisco, HP, Siemens Enterprise Communications (SEN),
Microsoft and Ericsson sought interest in Alcatel-Lucent’s enterprise business.
There were media reports saying the slowdown in Europe is prompting
Alcatel-Lucent to decide against divesting its enterprise business.
Revenues
in its Enterprise applications business in Q2 2011 decreased 6.6 percent to
Euro 285 million from the year-ago quarter. Genesys, its customer contact
center software business, grew high single-digit at driven by the ongoing
strong recovery of its core call center business as well as the rapid growth in
adjacent markets such as iWD, WFO and Analytics.
Alcatel-Lucent’s
revenue from Enterprise telephony and data networks in Q2 2011 declined at a
mid single-digit rate, impacted by temporary disruptions in the supply chain,
following a move to a new logistics hub in Europe. Its Enterprise data business
nonetheless remains poised for strong growth with an increase in bookings of
close to 40 percent and more than 20 new customers for the Omniswitch 10k, its
flagship 10-gigabit Ethernet switch.
Recently,
Alcatel-Lucent received a binding offer of $1.5 billion from a company owned by
the Permira funds for the acquisition of its Genesys business. The purchase
price of US$1.5 billion would be paid in cash on a debt/cash-free basis.
Genesys
which reported 2010 sales of approximately $500 million – is a recognized
world leader in customer service software and contact center solutions for
enterprises. The contemplated deal would include the transfer of the
approximately 1,800 employees worldwide, the management team and the existing
business structure to ensure seamless continuity with customers and other
stakeholders.
By
Baburajan K
[email protected]
