HP Inc. announced a blockbuster deal to acquire Poly, a global provider of video conferencing hardware, conference phones and headsets, for US$40 per share or US$3.3 billion in a bid to boost HP’s hybrid office business.
HP said it wants to bolster its peripherals offerings after the last two years of worldwide pandemic life has forced a huge increase in work-from-home and hybrid office needs.
“The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work gets done,” Enrique Lores, HP’s president and chief executive, said in a statement. “Combining HP and Poly creates a leading portfolio of hybrid work solutions across large and growing markets.”
Poly was born out of a 2018 US$2 billion acquisition of video and audioconferencing company Polycom by Plantronics, which offered office-based headsets. This isn’t the first peripheral move HP has made: Last year, HP bought gaming peripherals business HyperX for US$425 million, a company that specializes in gaming headsets for both PCs and console systems.
HP will use a combination of balance sheet cash and new debt to finance the acquisition, the company said in a call this week with investors.
Alex Cho, HP’s president of personal systems, told CRN USA, “I really think this is going to be a real win-win. Think about it from a channel perspective – they’re going to get a portfolio that is so meaningful for the future. This is about hybrid work … (channel partners) will be able to cross sell and upsell all these new innovative solutions that we have planned together.”
Poly CEO Dave Shull said in a statement that the acquisition provides an opportunity for both companies to expand their reach. “I am thrilled about the opportunity this represents for Poly, our employees, partners and customers,” he said. “The combination gives us an opportunity to dramatically scale, reaching new markets and channels, supercharging our innovation with a like-minded partner. This transaction offers compelling and certain value for our shareholders and speaks to the hard work done by our teams to become a recognized leader in helping businesses everywhere meet the challenges of a generational disruption in the way people work.”
HP expects to close the acquisition by the end of this year once they get approval from Poly shareholders and federal regulators.
Lores said the company still intends to fulfill a plan to buy back US$4 billion of HP shares in fiscal year 2022.
Poly has seen recent financial struggles, with flat revenue performance and supply chain issues. The company recently projected US$1.7 billion in revenue for fiscal 2022, down from US$1.74 billion in fiscal 2021.
HP, on the other hand, posted record revenues in its most recent quarter. The company said it expects to realize US$500 million of revenue synergies from the purchase by 2025 and hopes to speed Poly’s growth rate to 15 percent annually within the first three years.
Poly’s Friday stock close was US$26.20, so the US$40 per-share sale acquisition price represents a 53 percent premium. The purchase news sent Poly stocks soaring Monday morning to about US$38.94 per share – up nearly 50 percent in the first hour of trading.
On Poly’s most recent investor call, Shull said: “The future of work is hybrid, which is to say for any given workforce, some percentage of folks will be remote, some percentage of the time, while the balance will be in the office.”