Some acquisitions truly make sense, and this one seems a perfect marriage of two complementary businesses, targeting exactly the same markets, with no overlap. Polycom was once much larger than Plantronics, when it was acquired in 2016 by an investment firm. Before that, Polycom was a leading company in the videoconference and telepresence spaces, and its growth was even accelerated with several strategic key-technology acquisitions. But what was once a thriving business with great corporate budgets, was quickly eroded with the disruption of smartphones, tablets, Skype and Facetime. Imagine being the head of that multinational writing a report to justify the company's multimillion investment in telepresence rooms, and define a strategy to "promote a culture of internal meetings using videoconference," when a member of the board calls you on Skype to your laptop and your own daughter just used FaceTime to call you on your iPhone... That's what happened to Polycom years ago.
Since then, Polycom refocused its portfolio of products targeting the now reimagined "unified communications and collaboration" (UC&C) space, with more audio/voice solutions and increasingly less video hardware. Plantronics acquired Polycom for roughly the same amount that company was sold two years ago, basically getting an experienced engineering team, great sales (someone with the experience of selling hardware-based videoconference systems needs to be good) and the company's IP.
Both companies where already selling to the same market - the UC&C space - where everyone needs to be interoperable with personal mobile devices and laptops, and where basically everything is now about communication software from the likes of Microsoft (Skype), Cisco, BlueJeans, Zoom and others. Both companies offer complementary hardware, and both where already making the transition to solutions, including data analytics and management. Combined, the two companies promised to be truly better together.
The big question about the future of both companies remains how the transition will handle redundancies, how much talent will be retained (these things always cause people to leave, especially in a very competitive environment, where job offers abound), and how much of the existing products from both brands will actually be kept, integrated and updated. Another challenge will be how much of the consumer electronics' focus will be retained by Plantronics, considering that the combined company is now much more dependent of the education, healthcare, industrial, government, and corporate markets in general.
According to Plantronics, CEO and President Joe Burton has assembled his leadership team from the deep talent of both companies. "His new “dream leadership team” showcases the complementary nature of this acquisition, and how the sum of the team, talent, and technology is greater than its parts," the company states. “Plantronics now offers an unparalleled portfolio of integrated, intelligent solutions that spans headsets, software, desk phones, audio and video conferencing, and cloud services. This combined offering empowers people with the tools and flexibility they need to create the best experience when connecting to what is most important to them,” he states.
Don Williams, EVP Engineering, Plantronics says about this next chapter: “Our sights are set on experience-driven engineering. From the sleek design of the Polycom Trio to the personalized style of your Plantronics headset, the best technology fits your personal style at work to a night on the town.
“Whether it’s great work or a great workout, we’ve got you covered. We’re passionate about designing great technology to optimize your performance. Polycom and Plantronics together have limitless potential. Together, we can drive the user experience across the whole enterprise for collaboration.”
With the announcement of the closing of the acquisition, Plantronics also unveiled a new Strategic Plan, focused on "unlocking human potential at work and at home." The diagram details a segmentation on voice, video, content, and cloud solutions "for every place that technology touches people as they work, share, collaborate, and play."
"As trends in enterprise communications move toward open work spaces and flexible work arrangements, the ecosystem of platforms and devices continues to expand. With the addition of Polycom’s leading portfolio, Plantronics can offer a premium experience regardless of the UCC solutions selected by the customer," the company states.
Under terms of the acquisition agreement, Plantronics acquired Polycom at a $2.0 billion enterprise value with the total consideration consisting of approximately $1.638 billion in cash and 6.352 million Plantronics shares, resulting in Triangle Private Holdings II, LLC, which was Polycom’s sole shareholder, owning approximately 16.0% of Plantronics following the acquisition.
www.polycom.com | www.plantronics.com
