Alca-Lu gets $1.5B offer for Genesys, still has sputtering enterprise biz

Alcatel-Lucent (NYSE: ALU), which has been trying to slip out of its enterprise phone business for months, today confirmed last week's rumors that it's reached a deal with Permira Funds for its Genesys call center software business.

The $1.5 billion deal makes for a nice bump to Alca-Lu's sagging bottom line, but also leaves it with a somewhat unattractive left over in the form of its enterprise phone business. The Genesys business has by far been its crown jewel in the division, with revenues of $500 million last year. The deal for the 1,800 employee business includes continued support from Alcatel-Lucent's enterprise operation.

"Genesys is widely recognized as one of the world's leading providers of customer service software and contact center solutions, and we are excited by the long-term growth potential of this business," said Brian Ruder, partner at Permira. "With an exceptional brand, differentiated technologies and a blue-chip customer base, Genesys is well-positioned to continue to take advantage of the positive trends in its expanding markets."

The deal is subject to regulatory review in the U.S. and other countries, but is expected to close by the end of 2011 or beginning of 2012.

The negotiations between Alcatel-Lucent and Permira have been back-and-forth over the past couple of months as Permira initially looked at Alca-Lu's entire enterprise business, even reaching the point of exclusive negotiations that push Siemens Enterprise Communications, another potential bidder, to the back burner. Those talks broke down, reportedly over price, and drove Alca-Lu's battered stock down more than 8 percent.

Permira then brought its focus to just the call center segment, which Alcatel-Lucent acquired in 2000.

Selling the entire business, which includes VoIP, unified communications and network management products, as well as switches and router, would have been much preferred by Alca-Lu, which reportedly will now invest in the business to make it more attractive to bidders.

Alcatel-Lucent CEO Ben Verwaayen is looking to pare down the company as he tries to turn it around.

For more:
- see this release

Related articles:
Report: Alcatel-Lucent makes deal to sell Genesys unit to Permira
Permira talks with Alcatel-Lucent focus now on Genesys