HP is acquiring collaboration solutions manufacturer Poly in an all-cash deal worth $3.3 billion in a bid to further develop the company’s hybrid work and collaboration solutions and position the company for long-term, sustainable growth.
According to HP’s news release, the acquisition is centered around Poly’s portfolio of devices such as webcams, videoconferencing bars, headsets, speakerphones and other hybrid work solutions as the demand for hybrid work continues to be strong two years into the pandemic.
HP hopes the Santa Cruz, Calif.-based Poly will help drive the growth and scale of the company’s peripherals and workforce solutions business, an opportunity that HP estimates to be $110 billion and growing 9% annually due to the need to set up, manage and secure distributed IT ecosystems.
The idea is to combine Poly’s devices, software and services with Palo Alto, Calif.-based HP’s strengths across endpoint devices, device management and security to create a “robust portfolio” of hybrid work solutions, the company says in a press release.
HP does already offer some collaboration solutions and conference room technologies, including a mini conferencing PC, intelligent room controls, a 4K AI-enabled camera, an audio/video bar, microphones and more, as part of the company’s HP Presence series. However, Poly has a much larger and more developed portfolio of devices, including a range of solutions for both large conferencing rooms and single workstations.
Enrique Lores, president and CEO of HP, says in a statement that the rise of the hybrid office creates a “once-in-a-generation” opportunity to redefine the workplace.
“Combining HP and Poly creates a leading portfolio of hybrid work solutions across large and growing markets,” Lores says. “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.”
For Poly, the acquisition gives the company an opportunity to “dramatically scale” and reach new markets and channels with HP as a partner, says Dave Shull, president and CEO, in a statement.
“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,” Shull says.
Meanwhile, Zoom founder and CEO Eric Yuan says platforms like Zoom and Microsoft Teams will continue to play important roles in hybrid work models, which necessitates high-quality audio and video solutions.
“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,” Yuan says.
HP says the acquisition of Poly will bring “substantial revenue synergies” in peripherals and meeting room and workforce solutions with the ability to cross-sell across its global commercial and consumer sales channels.
The company will also combine Poly’s products with HP’s portfolio of PCs, and expects to achieve $500 million of revenue synergies by fiscal 2025 and accelerate Poly’s revenue growth to about a 15% combined annual growth rate over the first three years of the combined company. Poly’s operating margins are also expected to improve by 6 percentage points from current levels by that time, according to HP.
The deal is expected to close by the end of 2022, subject to shareholder approval.