Aiming to raise $1 billion, Avaya Holdings filed for an IPO on Thursday. The company is a telecommunications equipment maker, producing a range of equipment including telephones and internet-based teleconferencing products. The lofty fund-raising target is likely attributable to confidence stemming from a renewed interest in tech companies such as LinkedIn.
TPG Capital and Silver Lake has owned Avaya since purchasing the company in 2007 for roughly $8.2 billion. In recent months, private equity firms such as TPG have been eager to sell off their holdings in order to generate returns for their investors. The percentage of Avaya’s 487.3 million shares that will be sold when the company debuts remains unknown.
For the time being we can only speculate as to how the IPO will fare, although there have been a few early reasons for concern. For the year ending September 30th, Avaya reported a $936 million net loss. Also disconcerting is the fact that while tech companies have fared well in recent IPO’s, this has been less true for those companies brought to the public market by their private equity owners. Freescale Semiconductor, for instance, is down 4 percent since trading began two weeks ago.