Avaya has agreed to be bought by Silver Lake Partners and the Texas Pacific Group for $8.2 billion.

The deal is the largest private-equity buyout of a network company and gives Avaya shareholders $17.50 in cash per share.

"In addition to delivering compelling value for our shareholders, the partnership with Silver Lake and TPG also creates clear value for Avaya employees and customers," said Avaya CEO Louis D'Ambrosio in a statement. The new operating structure under private ownership will improve the company's ability to develop its technology and services, he added.

The deal was approved by the Avaya board of directors, which is recommending shareholders adopt the agreement. The deal is expected to close in this fall.

The per-share price of the deal is 28% higher than Avaya's stock price when news of a potential deal surfaced last week. Speculation grew that Avaya would go private, either through a private-equity buy, or in an acquisition by Nortel or even Cisco.

Some observers questioned the product overlap and massive integration costs that might come with an acquisition by competitors. Many said a private-equity buyout made more sense.

Avaya was the former enterprise telecommunications arm of Lucent, and was spun off from that company in 2000.

Avaya made $5.2 billion in revenue and $220 million in profits in its last fiscal year, and is worth $6.2 billion overall. In the first quarter of 2007, Avaya was the leader in worldwide enterprise telephony revenue, which includes IP and TDM phone equipment, with 19% of the $2.1 billion market, according to Synergy Research Group.

Cisco was second with 16% while Nortel was third with 13%.