Will PEC Pay Off for Nortel?

Nortel announced yesterday it has won a contract extenstion from the U.S. Department of Homeland Security to provide services to the U.S. Citizen and Immigration Service. The deal was won by Nortel’s PEC Solutions division, which was acquired in April, 2005 for $443-million as a key part of ex-CEO Bill Owens’ focus on the federal government market. If truth be told, PEC is a second-tier systems integrator that provides services exclusively to the U.S. government. The question was (and is) whether Nortel had to spend a good chunk of its much-needed cash to make the PEC acquisition. You have to wonder whether PEC fits into CEO Mike Zafirovski’s new strategic vision – whenever he decides to let the rest of the know in on where Nortel is going.


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