Global business and consumer audio solutions company Plantronics, have announced that they will be acquiring Polycom in a deal worth approximately $2 billion.
The deal which has apparently been approved by the boards of directors of both companies will however not be finalised or closed until the end of the third financial quarter of this year. As we saw in the deal which saw Cisco acquire BroadSoft any transaction of this size is subject to regulatory approval and other confirmations before being ratified. At the time there were fears the Cisco BroadSoft transaction would not be completed due to competition concerns however in this case there appear to be no major hurdles to completion. Still the deal is not straight forward and the $2 billion will be comprised of a combination of cash, Plantronics’ stocks and net debt and will still leave the existing Polycom shareholders with 16%.
The consolidation does greatly enhance Plantronics offering within the collaboration and communication markets and promises to be the main reason behind the purchase. Plantronics have provided the following statement through Joe Burton, President and Chief Executive Officer.
“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. This will put Plantronics in an ideal position to solve for today’s enterprise collaboration requirements while capitalising on market opportunities associated with the evolving, intelligent enterprise.”
It will be interesting to see how the respective product portfolios will be consolidated as there is likely to be an overlap in terms of products.
Cavell Group, among the leading communications consultancy and research firms, have been monitoring the situation within the market and will analyse the agreement moving forward. Matthew Townend, Director of Cavell Group has already been considering some of the more interesting angles.
“It’s interesting that this deal is on the back of Broadsoft/Cisco where Siris Capital, the owners of Polycom, were rumoured to be an interested bidder. Did this represent a different course and exit for Siris following Broadsoft going to Cisco, and a way of building a much more significant competitor to Cisco. We do note two directors of Siris are on the new board and Polycom shareholders still own 16% of the combined entity. “
We have also spoken to Stephanie Watson, General Manager at MZA Consultants. MZA are a leading telecoms & IT analyst firm and have reviewed the news.
“This seems like a very natural fit and I can’t believe that there wasn’t either a Plantronics/Polycom or Jabra/Polycom tie up before now. Polycom remain a leading provider of voice, video endpoints and collaboration solutions and have also been building up their services and analytics capability. Plantronics are an audio leader and leading headset provider but have also been adding value with their analytics and services. The combination of the two means a strong offering for customers and the channel and service provider space spanning the breadth of audio, voice, video and collaboration solutions. Lots of economies the combination of the two can also bring as outlined in the press release.”
As usual there will be much speculation moving forward, whilst the deal is finalised, but the main concern tends to be for staff during a time of uncertainty. Polycom have nearly 3,000 employees and in the long run their futures are uncertain.
