Palo Alto, Calif.-based HP Inc. today announced the completion of its acquisition of Santa Cruz, Calif-based Poly. The latter is, of course, a prominent global provider of workplace collaboration solutions. According to HP, the deal will accelerate its strategy to create a more growth-oriented portfolio. Moreover, the company says, it will strengthen its industry opportunity in hybrid-work solutions and position the combined organization for long-term sustainable growth. Word of the transaction broke this past March. HP expects it to be accretive to revenue, non-GAAP operating profit and non-GAAP EPS in FY23 post-merger.
Enrique Lores, president and CEO of HP, calls this “a historic day for our business,” celebrating the union of two hybrid-work-focused organizations. He continues, “Poly brings incredibly strong talent, differentiated technology and a complementary go-to-market system that we believe will further strengthen our position in large and growing markets.”
Adjusting to Hybrid
The merger comes as businesses and employees alike adjust to a hybrid world. Roughly 75% of office workers are investing to improve their home setups. In addition, traditional office spaces are being reconfigured to support hybrid work and collaboration. In particular, there is a heavy focus on meeting-room solutions. Right now, more than 90 million rooms exist. Of those, less than 10% have video capability. As a result, the office-meeting-room-solutions segment is expected to triple by 2024.
Poly, of course, is known for its videoconferencing solutions, cameras, headsets, software and more. In bringing those to HP, customers will be empowered to create meeting equity between those in the room and those not in the room. Indeed, the combined organization will deliver a complete ecosystem of devices, software, and digital services. In so doing, it will create premium employee experiences, improve workforce productivity and provide enterprise customers with better visibility, insights, security and manageability across their hybrid IT environments.
The addition of Poly will help HP drive innovation and scale in two of its key growth areas. First, there are peripherals, which represent a $110 billion segment opportunity. They’re growing 9% annually, driven by the need for more immersive experiences. Second, there are workforce solutions, which represent a $120 billion segment opportunity. They’re growing 8% annually, as companies invest in digital services to set up, manage and secure more distributed IT ecosystems.
With the transaction completed, Poly’s CEO, Dave Shull, will join HP as president, Workforce Services & Solutions, starting November 1. Shull will lead the newly formed organization focused on driving a more expansive growth agenda across HP’s commercial services business. Shull will join the HP executive leadership team and report to Lores. Meanwhile, Andy Rhodes will run the combined HP-Poly business as general manager, Hybrid Work Solutions & Peripherals. Rhodes will continue to report to HP Personal Systems president Alex Cho.
HP completed the deal as an all-cash transaction of $40 per share. That implies a total enterprise value of approximately $3.3 billion, inclusive of Poly’s net debt. The transaction was financed through a combination of balance sheet cash and new debt.