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HP Inc spends US$3.3B on Poly

HP Inc spends US$3.3B on Poly

Transaction strengthens hybrid work strategy.

Enrique Lores (HP)

Enrique Lores (HP)

Credit: HP

HP Inc has acquired unified communications vendor Poly in an all-cash transaction for US$40 per share, implying a total enterprise value of US$3.3 billion.

The acquisition accelerates HP’s strategy to create a more growth-oriented portfolio, further strengthens its industry opportunity in hybrid work solutions and positions the company for long-term sustainable growth and value creation.

“The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work gets done,” HP CEO and president Enrique Lores said. 

“Combining HP and Poly creates a portfolio of hybrid work solutions across large and growing markets. Poly’s strong technology, complementary go-to-market and talented team will help to drive long-term profitable growth as we continue building a stronger HP.”

Poly CEO and president Dave Shull said the combination of HP and Poly provides an opportunity to dramatically scale, reach new markets and channels.

“This transaction offers compelling and certain value for our shareholders and speaks to the hard work done by our teams to become a recognised leader in helping businesses everywhere meet the challenges of a generational disruption in the way people work,” he added.  

HP will cross-sell across its global commercial and consumer sales channels while driving incremental sales from combining Poly’s products with HP’s PC portfolio. As a result, HP expects to achieve US$500 million of revenue synergies by FY25 and accelerate Poly’s revenue growth to an approximately 15 per cent compound annual growth rate (CAGR) over the first three years after closing. 

In addition, HP expects the transaction to improve Poly’s operating margins by approximately six percentage points from current levels by FY25, driven by scale efficiencies across supply chain, manufacturing and overhead.

The transaction is expected to close by the end of calendar year 2022, subject to Poly stockholder approval, required regulatory clearances and the satisfaction of other customary closing conditions. HP will finance the transaction through a combination of balance sheet cash and new debt.

Zoom CEO and founder Eric Yuan said high quality audio and video had become an essential component of work across every industry, whether in an office, at home, or on the go. 

“Bringing the Poly and HP offerings together will unlock new opportunities to partner with Zoom and turn any space into a hub for dynamic video collaboration,” Yuan said.

HP has been building up its hybrid work portfolio during the past few months, acquiring remote computing software provider Teradici Corporation last July. Meanwhile, Poly rebranded from Polycom in 2019 following the US$2 billion acquisition of communications vendor Plantronics.

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