Private equity backed NewNet Communication Technologies is acquiring a business unit from Nokia Siemens Networks, Reuters reported Tuesday. Financial terms of the deal were not released. NewNet is owned by California-based private equity firm Skyview Capital.
(Reuters) – Struggling mobile telecom gear venture Nokia Siemens Networks (NSN) said on Tuesday it had agreed to sell a unit working on a niche WiMax technology to private-equity backed NewNet Communication Technologies.
The sale is the first for loss-making NSN since it last week announced plans to sell units and axe 17,000 jobs, nearly a quarter of its workforce.
The price of the deal — which includes the complete WiMAX product portfolio, the related employees and assets, as well as active customer and supplier contracts — was not disclosed.
NSN said in a statement the deal was expected to close next month and some 300 NSN employees would transfer to NewNet.
NewNet is owned by California-based private equity firm Skyview Capital LLC.
“This transaction represents a significant milestone in our strategy of building a strong global presence in the telecommunications marketplace,” Alex Soltani, chairman and CEO of Skyview Capital, said in a statement.
NSN, which has struggled to make a profit since being set up in 2007, was formed by Finnish cellphone maker Nokia and German conglomerate Siemens in the hope of building enough scale to lead an industry dominated by Swedish company Ericsson and, increasingly, by Chinese entrants.
It has faced aggressive pricing from rivals and an economic downturn that has forced telecoms companies to cut spending.
Last week NSN Chief Executive Rajeev Suri said in a letter to employees that the company would seek to exit or to put “on maintenance mode” businesses such as fixed-line VoIP, broadband access, WiMAX, narrowband, carrier Ethernet, business support systems, and communications and entertainment solutions. (Reporting By Tarmo Virki and Jussi Rosendahl; Editing by Helen Massy-Beresford)