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Comms M&A continues with Polycom acquisition

Polycom changes hands for the second time in less than two years

Polycom has been sold to headset maker Plantronics for $2bn (€1.62bn), after spending just more than 18 months under private equity firm Siris Capital.

Santa Cruz-based Plantronics claims the acquisition will create "the broadest portfolio" of complementary products and services in the UCC market.

The deal will consist of an estimated $690m of net debt, roughly $948m in cash and 6.35 million Plantronics shares. Plantronics claims the deal is likely to close in the third quarter of this year.

Plantronics' offer at $2bn represents the exact same valuation given by Siris Capital, when the private equity firm thwarted a $1.96bn takeover attempt by UCC vendor Mitel in July 2016.

At the time, some Mitel partners criticised the move, describing Polycom's videoconferencing products as "legacy technology".

Plantronics claims the acquisition will enable the firm to "capture additional opportunities" in a UCC market worth $39.9bn, in addition to giving channel partners an expanded services offering with a "meaningful presence" in management and analytics services.

"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," said Plantronics CEO Joe Burton.

Polycom generated revenues of $1.14bn in 2017 and an operating profit of $94.8m. Plantronics claims the deal will help it achieve annual run-rate cost synergies of $75m within 12 months of the transaction's close.

"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, CEO 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 connection

The deal follows a flurry of activity in the UCC space, with Mitel acquiring rival ShoreTel last year, Avaya entering Chapter 11 last January before re-emerging as a public company a year later, and Extreme Networks snapping up business units from Avaya and Brocade.

Polycom itself made an acquisition at the beginning of the year, when it bought out Californian voice over IP (VoIP) vendor Obihai Technology.