HP Inc. (NYSE: HPQ) today announced a definitive agreement to
acquire Poly (NYSE: POLY), a leading global provider of workplace
collaboration solutions, in an all-cash transaction for $40 per
share, implying a total enterprise value of $3.3 billion, inclusive
of Poly’s net debt.
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 hybrid work is creating sustained demand for
technology that enables seamless collaboration across home and
office environments. Approximately 75% of office workers are
investing to improve their home setups to support new ways of
working1. Traditional office spaces are also being reconfigured to
support hybrid work and collaboration, with a focus on meeting room
solutions. Currently, there are more than 90 million rooms, of
which less than 10% have video capability2. As a result, the office
meeting room solutions segment is expected to triple by 20243.
“The rise of the hybrid office creates a once-in-a-generation
opportunity to redefine the way work gets done,” said Enrique
Lores, President and CEO of HP. “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.”
Dave Shull, Poly CEO and President, added: “I am thrilled about
the opportunity this represents for Poly, our employees, partners
and customers. 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 recognized leader in helping businesses everywhere meet
the challenges of a generational disruption in the way people
work.”
In a more hybrid world, cloud platforms like Zoom and Microsoft
Teams will play an important role in innovating new experiences.
Eric Yuan, Founder and CEO of Zoom added, “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. 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.”
Poly will help drive the growth and scale of HP’s peripherals
and workforce solutions businesses. Peripherals represent a $110
billion segment opportunity growing 9% annually, driven by the need
for more immersive experiences. Workforce solutions represent a
$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’s devices, software and
services, combined with HP’s strengths across compute, device
management, and security, creates a robust portfolio of hybrid
meeting solutions.
Poly is a leader in video conferencing solutions, cameras,
headsets, voice and software. Together, HP and Poly will deliver a
complete ecosystem of devices, software, and digital services to
create premium employee experiences, improve workforce
productivity, and provide enterprise customers with better
visibility, insights, security, and manageability across their
hybrid IT environments.
HP expects the transaction to be immediately accretive to HP’s
revenue growth, margins, and non-GAAP EPS at close. With the
expanded value proposition of a complete hybrid work solution,
combined with HP’s scale and go-to-market capabilities, HP expects
to realize substantial revenue synergies in peripherals as well as
meeting room and workforce solutions. HP will be able to 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 $500 million of
revenue synergies by FY25 and accelerate Poly’s revenue growth to
an approximately 15% 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
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.
This transaction is consistent with HP’s capital returns program
target. HP remains committed to aggressively buying back shares of
at least $4 billion in FY22, and to returning significant capital
to shareholders while continuing to invest in growth.
HP Conference Call
HP will be hosting a conference call with the investor community
at 5:30 am PT/8:30 am ET. The call is accessible at
www.hp.com/investor/hptoacquirepoly.
About HP Inc.
HP Inc. is a technology company that believes one thoughtful
idea has the power to change the world. Its product and service
portfolio of personal systems, printers, and 3D printing solutions
helps bring these ideas to life. Visit http://www.hp.com.
About Poly
Poly (NYSE: POLY) creates premium audio and video products so
you can have your best meeting -- anywhere, anytime, every time.
Our headsets, video and audio-conferencing products, desk phones,
analytics software and services are beautifully designed and
engineered to connect people with incredible clarity. They're
pro-grade, easy to use and work seamlessly with all the best video
and audio-conferencing services. Poly MeetingAI delivers a
broadcast quality video conferencing experience with Poly
DirectorAI technology which uses artificial intelligence and
machine learning to deliver real-time automatic transitions,
framing and tracking, while NoiseBlockAI and Acoustic Fence
technologies block-out unwanted background noise. With Poly
(Plantronics, Inc. – formerly Plantronics and Polycom), you'll do
more than just show up, you'll stand out. For more information
visit www.Poly.com.
All other trademarks are the property of their respective
owners.
Contacts
HP Communications & Investor Relations
MediaRelations@hp.com
InvestorRelations@hp.com
Poly Communications & Investor
Relations
John Goodwin
John.goodwin@poly.com
Mike Iburg
Mike.Iburg@poly.com
Additional Information about the Proposed Transaction
and Where to Find It
This communication is being made in respect of the proposed
transaction involving HP, Prism Subsidiary Corp. and Poly, and may
be deemed to be solicitation material in respect of such
transaction. A meeting of the stockholders of Poly will be
announced as promptly as practicable to seek stockholder approval
in connection with the proposed transaction. Poly expects to file a
proxy statement in both preliminary and definitive form and other
relevant documents with the U.S. Securities and Exchange Commission
(the “SEC”) in connection with the proposed transaction and the
solicitation of proxies in connection therewith. Promptly after
filing the definitive proxy statement with the SEC, Poly will mail
the definitive proxy statement and a WHITE proxy card to each
stockholder entitled to vote at the special meeting to consider the
transaction. STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER
RELEVANT DOCUMENTS THAT POLY WILL FILE WITH THE SEC WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Stockholders may obtain, free of charge, the preliminary and
definitive versions of the proxy statement, any amendments, or
supplements thereto, and any other relevant documents filed by Poly
with the SEC in connection with the transaction at the SEC’s
website (http://www.sec.gov). Copies of Poly’s definitive proxy
statement, any amendments, or supplements thereto, and any other
relevant documents filed by Poly with the SEC in connection with
the transaction will also be available, free of charge, at Poly’s
investor relations website (https://investor.poly.com) or by
contacting Poly’s Investor Relations at IR@poly.com.
Participants in the Solicitation
HP, Poly and certain of their respective directors, executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies from
Poly’s stockholders in respect of the proposed transaction.
Information concerning the ownership of Poly securities by Poly’s
directors, executive officers and other members of management who
may, under the rules of the SEC, be considered to be participants
in the solicitation of Poly’s stockholders in connection with the
proposed transaction can be found in their respective SEC filings
on Forms 3, 4, and 5, as well as in Poly’s Definitive Proxy
Statement for its 2021 Annual Meeting of Stockholders filed with
the SEC on June 14, 2021 and Annual Report on Form 10-K for the
fiscal year ended April 3, 2021 filed with the SEC on May 18, 2021,
in each case as supplemented by other public filings made, and to
be made, with the SEC by Poly. Information concerning HP’s
directors, executive officers and other members of management can
be found in HP’s Definitive Proxy Statement for its 2022 Annual
Meeting of Stockholders filed with the SEC on February 23, 2022 and
in HP’s Annual Report on Form 10-K for the fiscal year ended
October 31, 2021 filed with the SEC on December 9, 2021. Other
information regarding persons who may be deemed participants in the
proxy solicitation, including their respective interests by
security holdings or otherwise, will be set forth in the definitive
proxy statement that Poly intends to file with the SEC. These
documents can be obtained free of charge from the sources indicated
above when they become available.
Cautionary Statement Regarding Forward-Looking
Statements
This document contains statements, estimates, projections or
guidance that constitute forward-looking statements as defined
under the U.S. federal securities laws about the proposed
transaction based on current expectations and assumptions that
involve risks and uncertainties. If the risks or uncertainties ever
materialize or the assumptions prove incorrect, the results may
differ materially from those expressed or implied by such
forward-looking statements and assumptions. All statements other
than statements of historical fact are statements that could be
deemed forward-looking statements, including, but not limited to,
statements regarding the potential transaction between HP and Poly,
including any statements regarding the expected timetable for
completing the potential transaction, the ability to complete the
potential transaction, the expected benefits of the potential
transaction (including anticipated accretion to earnings and free
cash flow and anticipated EBITDA), future opportunities, and any
other statements regarding HP’s or Poly’s future expectations,
beliefs, plans, objectives, results of operations, financial
condition and cash flows, or future events or performance. Words or
phrases such as “future,” “anticipates,” “believes,” “estimates,”
“expects,” “intends,” “plans,” “targets,” “advances,” “commits,”
“drives,” “aims,” “forecasts,” “approaches,” “seeks,” “schedules,”
“predicts,” “projects,” “will,” “would,” “could,” “should,” “can,”
“may,” “outlook,” “guidance,” “goals,” “objectives,” “strategies,”
“opportunities,” “potential,” and similar terms or expressions are
intended to identify such forward-looking statements. These
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and other factors, many of which
are beyond the companies’ control and are difficult to predict.
Therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in such forward-looking statements.
The reader should not place undue reliance on these forward-looking
statements, which speak only as of the date thereof. Unless legally
required, HP and Poly undertake no obligation to update publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise. Among the important
factors that could cause actual results to differ materially from
those in the forward-looking statements include the ability to
obtain the requisite Poly stockholder approval; uncertainties as to
the timing to consummate the potential transaction; the risk that a
condition to closing the potential transaction may not be
satisfied, including approval of the proposed transaction by Poly’s
stockholders and receipt of regulatory approvals on the terms
expected or on the anticipated schedules; the effects of disruption
to HP’s or Poly’s respective businesses; the effect of this
transaction on HP’s or Poly’s stock prices and Poly’s ability to
retain and hire key personnel and maintain relationships with its
customers, suppliers and others with whom it does business; the
effects of industry, market, economic, political or regulatory
conditions outside of HP’s or Poly’s control; HP’s ability to
achieve the benefits from the proposed transaction, including its
integration of the businesses and technologies; the nature, cost
and outcome of any litigation and other legal proceedings,
including any such proceedings related to the proposed transaction
and instituted against HP or Poly; the occurrence of any events,
change or other circumstance that could give rise to termination of
the merger agreement; the risk that any regulatory approval,
consent or authorization that may be required or the proposed
transaction is not obtained or is obtained subject to conditions
that are not expected; and unknown liabilities. Other important
factors that could cause actual results to differ materially from
those in the forward-looking statements are described in HP’s
filings with the SEC, including its Annual Report on Form 10-K for
the fiscal year ended October 31, 2021, as well as in Poly’s
filings with the SEC, including its Annual Report on Form 10-K for
the fiscal year ended April 3, 2021. Other unpredictable or unknown
factors not discussed in this document could also have material
adverse effects on forward-looking statements.
©Copyright 2022 HP Development Company, L.P. The information
contained herein is subject to change without notice. The only
warranties for HP products and services are set forth in the
express warranty statements accompanying such products and
services. Nothing herein should be construed as constituting an
additional warranty. HP shall not be liable for technical or
editorial errors or omissions contained herein.
_________________________1 HP Proprietary Survey2 Frost &
Sullivan, State of the Global Video Conferencing Devices Market3
Frost & Sullivan, State of the Global Video Conferencing
Devices Market
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