HP has agreed to acquire Poly (formerly Plantronics) for a purchase price of $1.7 billion, with a total transaction value of $3.3 billion, including debt. HP’s bid of $40 a share came in at a premium of about 53% over Poly’s most recent closing price.
HP claims the new acquisition “will further enhance its opportunities in the hybrid work solutions industry and position the company for long-term sustainable growth and value creation.” It references a report by Frost & Sullivan titled “State of the Global Video Conferencing Devices Market,” which predicts 75% of office workers will invest in new hardware to enhance their hybrid work setups.
Shares of HP were down 1.4% in premarket trading on the news, but Poly’s shares were up 49% over the same trading period.
Before rebranding as Poly, Plantronics had split its interests between the consumer and business markets. However, since the name change in 2018, the company has focused entirely on office equipment.
While the transaction remained largely under the radar until this announcement, Poly had courted other suitors before. The company was in talks with Logitech at one point, but that merger ultimately fell through.
Enrique Lores, President and CEO of HP, said, “Combining HP and Poly creates an industry-leading portfolio of hybrid work solutions for large and growing markets.” Specifically, Poly will be used to help HP tap into a $110 billion peripheral market, the companies said.
This transaction also follows last year’s acquisition of Teradici, a company specializing in bringing high-performance computing to hybrid work environments, signaling a clear, overall shift in priorities to hybrid work.
HP expects the deal to “contribute immediately” to its revenue growth, margins and non-GAAP EPS once closed, with $500 in revenue synergies expected by 2025. That closing date is expected to occur sometime before the end of 2022, “subject to approval by Poly shareholders, required regulatory approvals and the satisfaction of other customary closing conditions.”