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Report: Avaya weighs PE buyout bid as alternative to potential Mitel merger

Avaya Holdings Corp. is mulling accepting an all-cash buyout offer from private equity firm Clayton Dubilier & Rice LLC, Reuters reported, citing people familiar with the matter.

The telecommunications equipment and software company has been in discussions with privately held peer Mitel Networks Corp. for months regarding a potential merger, according to the report. Such a deal would render a higher valuation to Avaya than what buyout firms have offered, but it would require Avaya shareholders to accept shares in the combined entity, Reuters reported.

A deal with Clayton Dubilier & Rice would value the company at a significant premium to its trading share price, the sources said, though the top-line figure would be lower than that offered by Mitel.

One source said Clayton Dubilier & Rice is considering teaming up with enterprise cloud solutions provider RingCentral Inc. on a potential deal, Reuters reported.

Avaya, which reportedly will decide which deal to pursue in the coming days, and Clayton Dubilier & Rice declined to comment on the matter, while Mitel and RingCentral did not immediately respond to requests for comment, the report noted.