Headset vendor Plantronics, is set to take on a larger slice of unified communications market after acquiring video conferencing vendor Polycom in a deal worth $2 billion.
The deal involves $948 million in cash and 6.3 million Plantronics shares with an estimated $690 million of net debt. Polycom shareholders will own about 16% of the combined company.
The acquisition of Polycom will open up opportunities for Plantronics to delve further into communications and collaboration services, providing a broad portfolio of complementary products and services across the segment.
The unified communications market is estimated to be worth about $39.9 billion, which is being driven by innovation in video, audio, data analytics and insight 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,” said Plantronics CEO and president Joe Burton.
Polycom CEO Mary McDowell added that bringing the two companies together will broaden the breadth of solutions available to customers and partners, creating a consistent user experience across many types of collaboration applications and devices.
“Polycom has returned to growth by focusing on building strong ecosystem partnerships and delivering innovative, smart solutions for our customers and partners,” she said.
The deal has been approved by both boards and is subject to regulatory approval, expecting to close at the end of the third calendar quarter of this year.
In 2016, Polycom was made private through a $1.7 million deal with Siris Capital Group and the new acquisition will see its founder and managing partner, Frank Baker and executive partner, Daniel Moloney, join the Plantronics board.
Wells Fargo Securities acted as the legal financial advisor to Plantronics.
Recent research revealed that Cisco (which uses Plantronics hardware in its UC offering) and Polycom both hold a combined 78% of the global telepresence market, according to data from Synergy Research Group.
Both vendors have owned more than 75% of the market for the last six quarters. The second half of 2017 saw Cisco with 55% of the telepresence market and Polycom’s share was at 23%.
IDG News Service
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