Headset maker Plantronics is to acquire unified communications specialist Polycom in a $2 billion deal aimed at giving it a broader portfolio of communications offerings to go with its current products.
The cash-and-stock deal comes just 18 months after Polycom Inc. (Nasdaq: PLCM) was acquired by investment fund Siris Capital following a bidding war with Canada's Mitel, another unified communications company. (See Siris Snatches Up Polycom, Leaving Mitel Bereft.)
The Plantronics deal will comprise $690 million in net debt, $948 million in cash and leave Polycom shareholders with about 16% of the combined company. Plantronics Inc. is to fund the takeover using cash on hand as well as $1.375 million in new debt financing.
Plantronics, which makes professional headsets that support unified communications services, appears to have its eye on Polycom's line-up of IP desktop phones and videoconferencing technology. Both companies are also Microsoft Corp. (Nasdaq: MSFT) partners, supporting Microsoft services such as Skype for Business, and will have a more powerful position in the Microsoft ecosystem following a merger.
Plantronics also said the takeover would give it a bigger presence in the market for 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," said Joe Burton, the CEO of Plantronics, in a company statement.
Plantronics reckons the deal will be "immediately accretive" to earnings per share and says it is targeting "annual run-rate synergies" of $75 million within 12 months of closing the transaction, which implies job cuts. It expects the deal to close by September this year.
It employs 3,852 people worldwide and generated revenues of $881 million in its last fiscal year -- up 3% on sales in 2016. Net income rose 21% over the same period, to $82.6 million.
Polycom's employee numbers are similar at 3,800. It made about $1.1 billion in sales in its most recent fiscal year, and $183.1 million in operating income, according to the Plantronics announcement.
— Iain Morris, News Editor, Light Reading