To all Avaya Local Presidents

The Unions were notified today that Avaya has been purchased by two
investment firms, Silver Lake and TPG. In discussions with Labor Relations
the company indicated that the contract and the represented employees will
continue intact. Discussions with the Senior Leadership will take place in
the very near future. We will keep the membership informed. If this
purchase is approved by the Shareholders, it means Avaya will be a privately
owned corporation and will not trade stock in the future.  (My, Bill T, emphasis added, )
As we have expressed to the company, we will evaluate this potential sale
and the impact it could or could not have on our members, and we will take
action if necessary accordingly. Our only interest is that our members and
retirees wages, pensions, benefits and jobs are protected.
We will keep everyone updated.

In Unity,

Avaya going private for $8.2 billion

WASHINGTON (MarketWatch) -- Avaya Inc. has agreed to be acquired by two investment firms in an $8.2 billion deal that would take the developer of corporate-phone systems private.

Late Monday, private-equity firms TPG Capital and Silver Lake said they'll pay $17.50 in cash for each share of Basking Ridge, N.J.-based Avaya (AV).

The buyout price represents a 28% premium above Avaya's closing price of $13.67 on May 25, the last trading day prior to initial reports about a potential transaction.

Avaya's stock rose 2.2% in recent trades Tuesday to stand at $17.09.

The latest deal is the second in the telecommunications sector to involve TPG, the global investment firm formerly known as Texas Pacific Group. TPG, with $30 billion in assets and extensive experience in technology companies, is also one of two investment firms that agreed last month to acquire wireless operator Alltel Corp. (AT) for $27.5 billion.

Bulging with cash and taking advantage of cheap debt, private-equity firms have been snapping up public companies at a rapid pace. They focus on companies with strong cash flow and little debt, banking on their ability to further improve the business with the aim of later selling it at a higher profit.

In 2006, Avaya posted net income of $200 million on 5% growth in sales to $5.15 billion. At of the end of the most recent quarter, Avaya was also holding a cash pile of $829 million and had no debt.

Yet the acquisition does nothing to diminish competition in what's a very tough market.

Corporate customers increasingly are switching to Internet-based phone systems to take advantage of added features and long-term cost savings. Avaya continues to battle technology juggernaut Cisco Systems Inc. for the top spot in that market.

Other major rivals include Nortel Networks Corp. and a Nokia-Siemens joint venture.

Cisco (CSCO) and Nortel (NT) reportedly showed an interest in acquiring Avaya, but the high price offered by TPG and Silver Lake may have pushed them to the sidelines. Analysts say those companies might eventually renew interest if TPG and Silver Lake succeed in making Avaya more profitable.

Although Avaya's board has approved the sale, the company still has 50 days under the agreement to solicit proposals from third parties.

If it were to accept a better offer, Avaya would have to pay the private-equity firms an $80 million breakup fee. The fee would jump to $250 million if Avaya sought to nullify the deal for any other reason.

Avaya's a former unit of Lucent Technologies, now Alcatel-Lucent (ALU), and both businesses once belonged to old AT&T Inc. (T). Included among Avaya's assets are a number of key patents in the field of Internet telephony.

Avaya expects the transaction to be completed in the fall. The status of senior management is unclear. Avaya spokesman Jim Finn said executives have been focused on completing the deal and would discuss their future with TPG and Silver Lake at a later date.