Publicly-traded Plantronics has agreed to acquire Polycom, a portfolio company of Siris Capital since September 2016, at an enterprise value of $2 billion.
Polycom is a provider of open, standards-based unified communications (UC) products for video, voice and content, teleconference, telecommunications, telepresence and infrastructure software, hardware and services. The company is a leader in the growing open SIP (Session Initiation Protocol) desktop phone market. SIP is a communications protocol for signaling and controlling multimedia communication sessions in applications that use the Internet for voice and video calls.
Polycom’s products are used by more than 400,000 companies and institutions worldwide that operate in a wide range of industries including education, healthcare, manufacturing, financial services, government, and entertainment. Last fiscal year, Polycom had revenues of $1.1 billion, a gross margin of 56.6%, and operating income of $183 million. Polycom is headquartered in San Jose, CA (www.polycom.com).
“Polycom has returned to growth by focusing on building strong ecosystem partnerships and delivering innovative, smart solutions for our customers and partners,” said Mary McDowell, the Chief Executive Officer of Polycom. “Bringing Plantronics and Polycom together will broaden the breadth of solutions available to customers and partners and create a consistent end-user experience across many collaboration applications and devices. As one company, Plantronics and Polycom will make it even easier for all customers to solve big-business problems through human-to-human connections.”
Plantronics (NYSE: PLT) is an electronics company that manufactures audio communications equipment for business and consumers. The company’s products support unified communications, mobile-use, gaming and music. Plantronics is headquartered in Santa Cruz, CA (www.plantronics.com).
“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,” said Joe Burton, President and Chief Executive Officer of Plantronics. “This will put Plantronics in an ideal position to solve for today’s enterprise collaboration requirements while capitalizing on market opportunities associated with the evolving, intelligent enterprise.”
“Siris recognizes the incredible opportunity in the unified communications industry and has been focused on building momentum in the industry for several years,” said Frank Baker, Founder and Managing Partner, Siris Capital. “We are excited about the long-term value that the combination of Plantronics and Polycom will create for customers, partners, stakeholders and employees.”
Siris Capital makes control investments in data, telecommunications, technology and technology-enabled business service companies in North America that are valued from $250 million to $2 billion. The firm was founded in 2011 and is headquartered in New York (www.siriscapital.com).
Under terms of the agreement, Plantronics will acquire Polycom for $948 million in cash and 6.352 million Plantronics shares, valued at $362 million, and the assumption of $690 million of net debt. The shares payment will result in Polycom shareholders owning approximately 16% of the combined company.
Plantronics will fund the cash portion of the purchase price with cash on hand and approximately $1.4 billion in new, fully-committed debt financing from Wells Fargo Bank.
Wells Fargo Securities and Morgan Stanley & Co. are the financial advisors to Plantronics. Moelis & Company and Macquarie Capital are advising Polycom.
© 2018 Private Equity Professional | March 29, 2018