Plantronics is acquiring Polycom in a cash and stock transaction valued at $2bn in enterprise value. This is almost the same amount Mitel failed to acquire its unified communications rival for in 2016, before Polycom was instead captured by a private equity firm.
Mitel did manage to acquire ShoreTel last year, and fellow UC player Avaya entered Chapter 11 bankruptcy last January, and came out of it a year later.
The latest transaction has been unanimously approved by the boards of directors of both companies, and is expected to close by the end of the third calendar quarter of 2018, said Plantronics, the headset specialist and UC player. “Polycom brings a global leadership position in voice and video collaboration, accelerating Plantronics' vision of delivering new communications and collaboration experiences,” said Plantronics.
It added that Polycom significantly expands Plantronics' services offering, providing a “meaningful presence in management and analytics services”.
For the full year 2017, Polycom had GAAP revenues of $1.1bn, a non-GAAP operating income of $183.1m and a non-GAAP operating margin of 16%.
Plantronics is targeting annual run-rate cost synergies of $75m within 12 months of the transaction close.
Plantronics will acquire Polycom for $2bn in enterprise value consisting of an estimated $690m of net debt and an estimated $948 million in cash, and 6.352m in Plantronics shares, valued at $362m. Polycom shareholders will own around 16% of the combined company. The deal will be funded in cash and newly arranged financing.
Joe Burton, CEO of Plantronics, said: "With the addition of Polycom's solutions across video, audio and collaboration we will be able to deliver a comprehensive portfolio of communications and collaboration touch points and services to our customers and channel partners.”
Mary McDowell, CEO of Polycom, said: “Polycom has returned to growth by focusing on building strong ecosystem partnerships and delivering innovative, smart solutions for our customers and partners.
"Bringing Plantronics and Polycom together will broaden the breadth of solutions available to customers and partners and create a consistent end-user experience across many collaboration applications and devices.”
Frank Baker, managing partner of Siris Capital, the PE firm that bought Polycom for $2bn in 2016, said: “Siris recognises the incredible opportunity in the unified communications industry and has been focused on building momentum in the industry for several years. “The long-term value that the combination of Plantronics and Polycom will create will benefit customers, partners, stakeholders and employees.”
