So, in what seems to be a bit of a shocker, we’ve had pretty big news break this morning. Polycom has announced they will be acquired by another massive endpoint provider, Plantronics. Plantronics has agreed to pay $2 billion in a cash and stock transaction, which was unanimously approved by both companies’ boards of directors.
Expected to close by the third calendar quarter of 2018, this certainly is an interesting change of events following the potential Polycom and Mitel acquisition we were hearing about just a short while ago.
So, I kind of covered all the important stuff already, but I want to break it down a bit further. First let’s look at the brief history of Polycom’s recent moves. On April 15 of 2016, Mitel announced an offer to purchase Polycom for roughly $1.96 billion. We, along with the rest of the industry, had discussed this potential merge at length — many confused as to what the motivations behind this were, and how it would alter the industry’s landscape.
However, just when it seemed like Mitel had Polycom in the bag, Siris Capital Group, LLC announced on July 08, 2016 that they were offering a $2.0 billion bid to purchase Polycom and its assets. This acquisition eventually went through, and Polycom became a privately-owned organization.
Now, we arrive to 2018. Just today the announcement has come out that Plantronics is offering another $2.0 billion to snatch up Polycom from the Siris Capital Group, LLC.
Now the next question many might ask is why did Plantronics, already a massive endpoint provider, seek to acquire another massive endpoint provider? Well, there’s always the goal of eliminating and absorbing your competition. According to the joint press release from both organizations, this move will “further accelerate Plantronics vision of an enterprise that is able to leverage powerful analytics, video and audio touchpoints to ignite all new communications and collaboration experiences.”
Essentially, Plantronics is looking to absorb Polycom’s technologies and solutions to enable them to offer the most compelling products possible, leveraging analytics, video and audio. According to Joe Burton, President and Chief Executive Officer, Plantronics:
“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 capitalizing on market opportunities associated with the evolving, intelligent enterprise.”
In fact, Polycom has laid out for specific strategic rationales within their announcement:
- Accelerates Plantronics Strategy. Polycom brings a global leadership position in voice and video collaboration, accelerating Plantronics vision of delivering new communications and collaboration experiences.
- Broadens Portfolio. With the addition of Polycom, Plantronics will have the broadest portfolio of complementary products and services across the global communications and collaboration ecosystem, and the ability to create exceptional user experiences.
- Expands Market Opportunity. The combination positions Plantronics to capture additional opportunities across the $39.9B Unified Communications and Collaboration industry driven by innovation in video and the ubiquity of audio, building growth opportunities through data analytics and insight services.
- Augments Services Business. Polycom significantly expands Plantronics services offering, providing a meaningful presence in management and analytics services.
To sum it all up, Mary T. McDowell, Chief Executive Officer of Polycom, said that “as one company, Plantronics and Polycom will make it even easier for all customers to solve big-business problems through human-to-human connections.”
The Bottom Line
This is an interesting shake up for the endpoint industry, with one less player in the market. This is obviously a power move for Plantronics, and one that should bolster their resources quite a bit. Siris Captial, on the other hand, recognizes that the value Plantronics can bring with this new partnership should be game changing for the industry.
“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.”
Overall, it will be very interesting to see how the endpoint market will look following this merge. I’m curious to see what Plantronics will do with its new resources, but of course only time will tell. Frank Baker, Founder and Managing Partner, Siris Capital and Daniel Moloney, executive partner at Siris Capital will be joining the Plantronics Board of Directors, following the closing of this deal.