The Ernst & Young monitor's report on Nortel's proposed sale of its Layer 4-7 business unit has some details to add to the record:* The business unit employs 104 FTEs. Radware is keeping 43 employees in Japan, India, Australia, the UK and Germany; it's not clear from the filing how many US workers there are and how many are being retained; the filing states only that there will be "offers to certain employees in the U.S. of at least 100% of their salary and benefits and no less favourable than Radware provides to its U.S. employees." Once again, Canadians appear to draw the short straw: "The 11 Canadian employees of the Layer 4-7 business will not be transferred to Radware."
* The unit has an installed base of more than 1,000 customers, and last year generated about $50 million in revenue.
* The report confirms that Nortel began trying to sell this business unit last year, receiving two "expressions of interest" and one term sheet. Evidently this overture did not come from Radware (the current "stalking horse buyer"), as E&Y report that Radware approached Nortel last December with an unsolicited offer for the business unit. Nortel judged Radware's offer superior to the previous term sheet submitted.
* The value of the business unit was judged to have fallen post-bankruptcy filing, resulting in the price falling to $17.65 million in cash.
* Nortel has approached a total of 34 companies to bid against Radware--as part of the bankruptcy process, the "stalking horse" buyer (Radware) can be outbid by subsequent would-be buyers. These companies have until March 19 to submit a bid.
