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HP to acquire Poly for improved hybrid working solutions
Thu, 31st Mar 2022
FYI, this story is more than a year old

HP has announced it is to acquire Poly in an all-cash transaction for $40 per share, estimated to be a total enterprise value of US$3.3 billion.

HP says the acquisition will fast-track the company's strategy to create a more growth-oriented portfolio and reinforces its industry opportunity in hybrid work solutions.

Additionally, it puts the company in a solid position to maintain 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 president and CEO Enrique Lores says.

“Combining HP and Poly creates a leading 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.

HP notes that the increase in hybrid work is creating a consistent demand for technology that affords users a seamless collaboration between home and office environments.

It adds that approximately 75% are investing in improvements for their home setups to facilitate new ways of working, and traditional office spaces are also being redesigned to better accommodate hybrid work and collaboration, particularly meeting room solutions.

HP also says that less than 10% of the 90 million existing meeting rooms have video capability, meaning that the office meeting room solutions segment is anticipated to triple by 2024.

“I am thrilled about the opportunity this represents for Poly, our employees, partners and customers,” Poly president and CEO Dave Shull says.

“The combination gives us an opportunity to dramatically scale, reaching new markets and channels, supercharging our innovation with a like-minded partner.

“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.

HP says cloud platforms such as Zoom and Microsoft Teams are also expected to play an integral role in innovating new experiences in the growing hybrid work environment.

“Highest quality audio and video has become an essential component of work across every industry, whether in an office, at home, or on the go,” Zoom founder and CEO Eric Yuan says.

“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.

The acquisition will see Poly assist in driving HP's growth and scale of its peripherals and workforce solutions businesses.

The company's peripherals account for a US$110 billion segment opportunity growing 9% annually, which HP says results from the need for more immersive experiences.

Furthermore, workforce solutions make up a US$120 billion segment opportunity that is growing 8% annually as companies invest in digital services to set up, manage, and secure more distributed IT ecosystems.

Poly is experienced in video conferencing solutions, cameras, headsets, voice and software.

HP says combining this with its own strengths across compute, device management, and security will facilitate the creation of a robust portfolio of hybrid meeting solutions for improved employee experiences and increased workforce productivity.

Moreover, it will also give enterprise customers stronger visibility, insights, security, and manageability across their hybrid IT environments.

HP anticipates the transaction will immediately contribute to HP's revenue growth, margins, and non-GAAP EPS at close.

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

In addition, HP says it remains committed to buying back shares of at least $4 billion in FY22 and returning significant capital to shareholders while continuing to invest in growth, adding that this transaction is consistent with its capital returns program target.