News broke this morning that two endpoint giants, Plantronics and Polycom, have struck a deal for the former to acquire the latter. In a cash and stock transaction valued at $2 billion, Plantronics will buy Polycom in what a joint press release called effort to bring new communications and collaboration experiences to the enterprise via analytics, video, and audio touchpoints.
The deal consists of an estimated $690 million of net debt, an estimated $948 million in cash, and 6.352 million Plantronics shares which are valued at $362 million. This will result in Polycom shareholders owning roughly 16% of the combined company, the release states.
The transaction has already been approved by the boards of directors of both companies, but it still has to undergo regulatory approvals and other customary closing conditions. The acquisition is expected to close by the end of the third quarter of 2018, the release states. Plantronics is aiming to achieve cost synergies of $75 million within the 12-months following the deal's close.
Plantronics sees four main benefits of the acquisition, as outlined in its press release. The addition of Polycom:
"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," said Joe Burton, president and CEO of Plantronics, in a prepared statement. "This will put Plantronics in an ideal position to solve for today's enterprise collaboration requirements while capitalizing on market opportunities associated with the evolving, intelligent enterprise."
Polycom is privately held. In early 2016, Mitel made an offer to acquire Polycom but was bested by private equity firm Siris Capital Group, which acquired Polycom for roughly $2 billion in cash in Fall 2016.
"Siris recognizes the incredible opportunity in the Unified Communications industry and has been focused on building momentum in the industry for several years," said Frank Baker, founder and managing partner at Siris Capital, in a prepared statement. "We are excited about the long-term value that the combination of Plantronics and Polycom will create for customers, partners, stakeholders and employees."
With the close of the deal, Baker will join the Plantronics Board of Directors, along with Daniel Moloney, executive partner at Siris Capital.
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