TORONTO – Nortel Networks has a preliminary agreement to sell its Multi Service Switch business for US$39 million in cash.
The ‘stalking horse’ asset sale agreement is with PSP Holding LLC, an entity formed by Samnite Technologies Inc., a communications technology company based in Ottawa, and Marlin Equity Partners.
These agreements include the planned sale of substantially all assets of the MSS business globally, including the associated Data Packet Network and Shasta product groups, plus certain intellectual property related to the MSS business.
"Today’s announcement is welcome news to all MSS customers, suppliers, partners and employees”, said John Luszczek, GM of Nortel’s MSS business, in a statement. “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. Throughout this process we will remain focused on providing our customers with the highest level of service, support and responsiveness that they have come to expect."
Nortel said that under the current arrangement, “substantially all” MSS employees would have the opportunity to continue employment with PSP Holding.
The insolvent company will file the stalking horse bid with the U.S. bankruptcy court in Delaware and Ontario, and will seek final approval after the bidding process has been completed.
