Avaya has announced it will buy Nortel’s enterprise division for $475 million, a move that will give the private-equity funded unified communications vendor twice the market share of its nearest competitors and allow it to set the direction of the emerging sector.

Avaya’s CEO Kevin Kennedy said the purchase, which includes all of Nortel’s enterprise voice, data and government systems businesses, was a “strategic opportunity to acquire talent and complementary assets”.

“The addition of Nortel Enterprise Solutions will increase Avaya’s global scale, expand our channel partner network, and strengthen our world-class portfolio of products and services,” he said.

Speculation was rife that Avaya was competing with Nokia Siemens Networks to buy Nortel’s enterprise assets. The latter eventually bought Nortel’s profitable CDMA and LTE assets, while Avaya waged an aggressive campaign to lure Nortel’s partners over to its own products.

Ironically, Avaya only just escaped being acquired by Nortel itself in the middle of 2007, when the then-struggling VoIP equipment manufacturer went private in an $8.2 billion deal with private funds TPG Capital and Silver Lake.

The acquisition, which is subject to the approval of bankruptcy courts in both Delaware and Ontario, essentially marks the end of the road for the 120 year old communications vendor, which last week ceded its sponsorship of the London 2012 Games to rival Cisco.

Further reading

Nortel’s Missed Calling
The financial misfortune of a telecommunications giant is reshaping the unified communications market. Could that at last trigger widespread enterprise adoption?