Avaya has confirmed it's looking at possible takeover bids for the company after a number of expressions of interest. The company hired JP Morgan to assist in looking at the strategic options. The announcement came alongside results below expectations for its fiscal second quarter to March.
The news follows reports that both private equity firms and rival Mitel were interested in a takeover of Avaya. The company emerged from protection from creditors only last year, but has struggled to regain momentum in the quickly consolidating market for enterprise communication systems.
Avaya reported revenues of USD 709 million for the March quarter, up from USD 672 million a year earlier but below its guidance of USD 730-760 million. The operating margin of 5.4 percent also fell short of the outlook, and adjusted EBITDA dropped to USD 166 million from USD 187 million a year ago. The net loss reduced to USD 13 million from USD 130 million, helped by the debt restructuring.
Avaya CEO Jim Chirico said the company is implementing "corrective actions" to try and improve performance, while the long-term outlook remains positive. Nevertheless, the company cut its full-year outlook issued in February and now forecasts revenues of USD 2.90-2.95 billion, an operating margin around 6 percent, and adjusted EBITDA of USD 700-730 million, down from USD 746 million last year.
For the fiscal third quarter, Avaya expects revenue of USD 707-722 million, an operating margin around 5 percent and adjusted EBITDA of USD 160-170 million.
