After hanging a 'for sale' sign on its structured cabling business more than a year ago, Avaya Inc. sold its Connectivity Solutions (ACS) arm Monday to CommScope Inc. in an US$263-million deal.
CommScope's bread and butter is in broadband coaxial cable for Hybrid Fibre Coaxial (HFC) applications. The Avaya ACS division will complement CommScope's offerings and brings enhanced global opportunities to the company in the enterprise LAN business, the company said.
"(The acquisition) is something that will make us both stronger in the long run. It is very much a win-win situation," said Betsy Lambert, spokesperson for CommScope.
According to Lambert, Avaya ACS customers can rest assured that as CommScope takes over, the company intends to continue to support and develop the ACS SYSTIMAX structured connectivity solutions. The ACS SYSTIMAX offering is a single network cabling solution that integrates voice, video and data on one network. She added that the company anticipates little changes in terms of personnel and operation.
Despite retaining a leadership position within the structured cabling spectrum, Avaya has been actively searching for a buyer of ACS since February 2002. According to Renaldo Juanso, spokesperson for Avaya in San Francisco, ACS makes a nice complement to CommScope and the move to sell the division is a strategic one.
"This is strictly another move in a series of strategic moves that the company has made to continue to drive its focus on its core businesses, which are IP (Internet Protocol) telephony and services," Juanso said. "Connectivity falls outside of that scope."
The move is a smart one as far as Roberta Fox is concerned. Fox, president and founder of Markham, Ontario-based Fox Group Consulting, said that it became apparent last year that Avaya was refocusing its efforts when it broke the company into four divisions -- IP telephony taking the top priority and services following closely behind. She noted that despite the concentration on IP, the cabling market in general has been one of the hardest hit by capital cuts.
"If strategically Avaya wants its business to be IP-focused, having a division (like ACS) that...isn't a focus for spending doesn't make a lot of sense. Selling [the business] while it still has value, does," Fox said.
She added that Avaya can now float a lot of R&D with its US$263-million check.