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    Plantronics Doubles Market Cap By Acquiring Polycom for $2 billion

    By
    Chris Preimesberger
    -
    March 29, 2018
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      Plantronics.Polycom.logos

      Plantronics, which makes communications peripherals such as audio headsets and microphones, doubled its market value March 28 by acquiring privately held Polycom.

      The deal was a cash-and-stock transaction valued at $2 billion.

      Polycom, which provides open standards-based unified communications packages for telepresence-type video, voice and collaboration functions, said it had revenue of $1.1 billion last year. It has about 400,000 customers worldwide.

      Santa Cruz, Calif.-based Plantronics, which banked revenue of $865 million last year in serving the mid-range and small business markets, produces audio communications equipment for the business and consumer markets. Its products enable unified communications, mobile use, gaming and music.

      Twenty-eight-year-old Polycom was unable to break into the top tier of unified communications vendors now occupied by Cisco Systems, Microsoft, Mitel, Hauwei, NEC, Avaya and Unify, according to a 2017 Gartner Research report. The combination of the San Jose, Calif.-based company with Plantronics may prove to be the multi-dimensional vendor enterprises large and small may seek out, analysts say.

      The combined market cap of the new company will be about $4 billion.

      Strategic Rationale

      With the acquisition, Plantronics–an established IT provider founded in 1961 that employs 3,850 people–said it expects to see the following benefits:

      • Accelerates strategy: Polycom brings a global leadership position in voice and video collaboration, accelerating Plantronics vision of delivering new communications and collaboration experiences.
      • Broadens portfolio: With the addition of Polycom, Plantronics will have the broadest portfolio of complementary products and services across the global communications and collaboration ecosystem, and the ability to create exceptional user experiences.
      • Expands market opportunity: The combination positions Plantronics to capture additional opportunities across the $39.9B Unified Communications and Collaboration industry driven by innovation in video and the ubiquity of audio, building growth opportunities through data analytics and insight services.
      • Augments services business:  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,” Plantronics President and Chief Executive Officer Joe Burton said in a media advisory. “This will put Plantronics in an ideal position to solve for today’s enterprise collaboration requirements.”

      Polycom has returned to growth by focusing on building strong ecosystem partnerships and delivering “innovative, smart solutions for our customers and partners,” Polycom CEO Mary T. McDowell said.

      “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,” McDowell said.

      The transaction has been unanimously approved by the boards of directors and is expected to close by the end of the third quarter of 2018, Plantronics said.

      Avatar
      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 16 years and more than 5,000 articles at eWEEK, he has distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.

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