According to the announcement, the acquisition is an all-cash transaction for $40 per share, implying a total enterprise value of $3.3 billion, inclusive of Poly’s net debt. "The acquisition accelerates HP’s strategy to create a more growth-oriented portfolio, further strengthens its industry opportunity in hybrid work solutions, and positions the company for long-term sustainable growth and value creation," HP announces.
For HP, Poly is expected to help drive the growth and scale of HP’s peripherals and workforce solutions businesses. Peripherals represent a $110 billion segment opportunity growing 9% annually, driven by the need for more immersive experiences. Workforce solutions represent a $120 billion segment opportunity that is growing 8% annually, as companies invest in digital services to set up, manage, and secure more distributed IT ecosystems. "Poly’s devices, software and services, combined with HP’s strengths across compute, device management, and security, creates a robust portfolio of hybrid meeting solutions," HP states.
This acquisition will be seen mainly as another "office-oriented" company falling into the rabbit-hole, as new incumbents are challenging the traditional UC&C concepts and basically obliterating what was once "a market". Following two years of a global pandemic that taught people that the last thing anyone wants to do is to return to meeting rooms and crowded open-space environments, and when Zoom replaced Skype as a verb, it's somewhat surprising to see a traditional PC and printer company still investing on traditional "workplace collaboration solutions".
The logic is explained by HP in the acquisition announcement, where HP says it believes that Poly will help it to transition to the new world of hybrid work and work-from-anywhere. "The rise of hybrid work is creating sustained demand for technology that enables seamless collaboration across home and office environments. Approximately 75% of office workers are investing to improve their home setups to support new ways of working. Traditional office spaces are also being reconfigured to support hybrid work and collaboration, with a focus on meeting room solutions. Currently, there are more than 90 million rooms, of which less than 10% have video capability. As a result, the office meeting room solutions segment is expected to triple by 2024".
"The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work gets done," says Enrique Lores, President and CEO of HP. "Combining HP and Poly creates a leading portfolio of hybrid work solutions across large and growing markets. Poly’s strong technology, complementary go-to-market, and talented team will help to drive long-term profitable growth as we continue building a stronger HP."
Dave Shull, Poly CEO and President, adds: "I am thrilled about the opportunity this represents for Poly, our employees, partners and customers. 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."
Eric Yuan, Founder and CEO of Zoom, also blessed the strategy of an hybrid world, where cloud platforms like Zoom and Microsoft Teams are supposed to play an important role in innovating new experiences. As he states: “Highest quality audio and video has become an essential component of work across every industry, whether in an office, at home, or on the go. Bringing the Poly and HP offerings together will unlock new opportunities to partner with Zoom and turn any space into a hub for dynamic video collaboration."
Poly is a strong supplier of video conferencing solutions, cameras, headsets, voice and software. Together, HP and Poly expect to deliver "a complete ecosystem of devices, software, and digital services to create premium employee experiences, improve workforce productivity, and provide enterprise customers with better visibility, insights, security, and manageability across their hybrid IT environments."
HP will be able to cross-sell across its global commercial and consumer sales channels, while driving incremental sales from combining Poly’s products with HP’s PC portfolio. The transaction is expected to close by the end of calendar 2022, subject to Poly stockholder approval, required regulatory clearances, and the satisfaction of other customary closing conditions.
www.poly.com
www.hp.com
