Plantronics, best known for its headsets, has inked a deal to acquire video conferencing device manufacturer Polycom for $2 billion.
Plantronics is financing the deal, which is expected to be finalised by the third quarter of 2018, via a mixture of cash and stock.
This week, the board of directors at both companies “unanimously approved” the transaction. Plantronics said that the deal will enable it to become “the partner of choice for the communications and collaboration ecosystem”.
Plantronics will buy the company with an estimated $948 million in cash, $690 million in debt and $358 million in shares. Polycom will get 16 per cent of company stock, overall.
The company expects to make an immediate return off the back of the deal, forecasting annual savings of $75 million.
The company claimed the deal would enable it to develop “new communications and collaboration experiences” and a new portfolio of video technology products.
Plantronics CEO Joe Burton said the company will now be able “to deliver a comprehensive portfolio of communications and collaboration touch points and services to our customers and channel partners”.
He said: “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.”
Mary T. McDowell, chief executive officer of Polycom, claimed that the company had engineered a turnaround under private equity ownership by “focusing on building strong ecosystem partnerships and delivering innovative, smart solutions for our customers and partners”.
However, the $2 billion purchase price was around the same price paid for the company by private equity firm Siris Capital just two years ago.
McDowell continued: “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.” .
Frank Baker, founder and managing partner of Siris, said: “Siris recognises the incredible opportunity in the Unified Communications industry and has been focused on building momentum in the industry for several years.”
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