Plantronics and Polycom have announced that they have entered into a definitive agreement under which Plantronics will acquire Polycom in a cash and stock transaction valued at US$2 billion.
The transaction has been unanimously approved by the boards of directors of both companies, is subject to regulatory approvals and other customary closing conditions, and is expected to close by the end of the third calendar quarter of 2018.
With the acquisition of Polycom, Plantronics portfolio of products and services across global communications and collaboration will be expanded considerably.
Additionally, Polycom significantly expands Plantronics services offering, providing 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,” says Plantronics president and CEO Joe Burton.
“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.
Polycom CEO Mary T. McDowell adds, “Polycom has returned to growth by focusing on building strong ecosystem partnerships and delivering innovative, smart solutions for our customers and partners.
"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 connections.
Under terms of the definitive agreement, Plantronics will acquire Polycom for US$2 billion enterprise value consisting of: an estimated US$690 million of net debt, an estimated US$948 million in cash, and 6.352 million Plantronics shares valued at US$362 million.
This will result in Polycom shareholders owning approximately 16.0% of the combined company.
Plantronics notes that “estimated amounts are subject to customary post-closing adjustments per the definitive agreement.
Plantronics intends to fund the cash portion of the consideration with cash on hand and approximately US$1.375 billion in new, fully-committed debt financing.
Wells Fargo Bank and affiliates have committed to provide the debt financing for the transaction, subject to customary conditions.
Plantronics expects to pay down a significant portion of the debt within the next several years with cash on the balance sheet and through cash generation.