(Bloomberg) -- Avaya Holdings Corp. is in talks to form a joint venture with videoconferencing provider RingCentral Inc. and is leaning toward abandoning plans for a full sale of the company, people familiar with the matter said.
Avaya, a communications software maker, has been exploring strategic alternatives and has held talks with private equity firms such as Searchlight Capital, which owns Mitel Networks, about a reverse merger. Financial terms of the proposed joint venture couldn't immediately be learned.
It's still possible that talks with RingCentral could fall apart, and the outcome of Avaya's strategic review isn't certain, said the people, who asked not to be identified because the discussions were private.
Avaya fell 11.6% at 9:32 a.m. in New York trading, for a market value of about $1.3 billion. That was its biggest drop since May. RingCentral rose 5.1%, for a market value of about $10.8 billion.
RingCentral, based in Belmont, California, provides software that runs communications systems for small and midsized businesses. A representative for RingCentral declined to comment. Avaya said in a statement Thursday that its strategic review continues and it remains in “advanced discussions.”
Avaya said Aug. 13 that it was in advanced talks with multiple parties about a deal and would bring its strategic review to a conclusion within 30 days. The Santa Clara, California-based company emerged from bankruptcy almost two years ago.
--With assistance from Nico Grant.
To contact the reporters on this story: Ed Hammond in New York at ehammond12@bloomberg.net;Scott Deveau in New York at sdeveau2@bloomberg.net;Liana Baker in New York at lbaker75@bloomberg.net
To contact the editors responsible for this story: Daniel Hauck at dhauck1@bloomberg.net, Ben Scent, Molly Schuetz
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