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ALU Enterprise Spinoff: Where They're Starting From

Alcatel-Lucent Enterprise officially separated from the parent ALU company this week, with the closing of the unit's sale to China Huaxin Post & Telecommunication Economy Development Center for 202 million Euros ($255.95USD million). The spun-off company will keep the ALU Enterprise name for now, but a rebranding is possible later.

I sat down with Jeanne Bayerl, ALU Enterprise's analyst relations director, at the Interop New York event, and while many future directions remain unannounced, Jeanne was able to give me some key details about the new ALU-E. (For the definitive deep dive on the deal, from the period of its initial announcement, you have to read Brian Riggs' February No Jitter post.)

The spun off company has the right to continue using the Alcatel-Lucent name, but is currently exploring the possibility of a rebranding, Jeanne Bayerl told me. A final decision and announcement about whether to proceed with a new name is likely to come early next year.

Bayerl stressed ALU-E's argument that it's better positioned than many of its peers in the legacy PBX/UC world, since Huaxin is buying an 85% share of the company outright, rather than the company being sold to a private equity invester that would load the cost of the acquisition onto the fledgling company--as PE investors have done with companies like Avaya. "We start with a new company with zero debt," she said.

The Alcatel-Lucent parent company will retain the remaining 15% of ALU-E.

Bayerl also insisted that Huaxin was "willing and anxious to invest more money" in pursuit of its goal of doubling ALU-E's annual revenues from the current 700 million Euros ($886.94USD million).

As for the concern over acquisition by a Chinese company--which has stymied U.S. tech deals in the past--Bayerl said that Huaxin has been "very focused on compliance" with whatever the governments have wanted in the countries where it will operate. She said the deal had had to pass muster with governments in France, the U.S., EU, China, and Russia.

As an example of Huaxin's willingness to address government concerns, Bayerl noted that some elements of the ALU-E portfolio relating to performance management and IP address management will not be coming along with the acquisition, because the U.S. government, which has been a major customer of these products, objected to them being controlled by Huaxin. Instead, a separate organization, controlled by a trustee, will manage these products.

The new ALU-E will be profitable from Day One, Bayerl said. It will start out with 2,700 employees, 500,000 customers and 2,500 partners worldwide.

The company, which will be headquartered in France, will have about 550 employees in North America.

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