Mergers and Acquisitions, Content, Mergers and Acquisitions, Content

HP Acquires Poly; Counters Cisco Video Conferencing Hardware

PALO ALTO, CALIFORNIA – OCTOBER 04: The Hewlett Packard (HP) logo is displayed in front of the office complex on October 04, 2019 in Palo Alto, California. HP announced plans to cut 7,000 to 9,000 jobs in an effort to save about $1 billion by the end of fiscal 2022. (Photo by Justin Sullivan/Getty Images)

PC and printer giant HP Inc. is acquiring collaboration technology company Poly (formerly Polycom and Plantronics) for $3.3 billion. The deal could position HP to compete more aggressively against video conferencing hardware from Cisco Systems, while partnering with Microsoft Teams, Zoom and Unified Communications as a Service (UCaaS) providers.

This is technology M&A deal number 307 that ChannelE2E has covered so far in 2022. See more than 1,000 technology M&A deals involving MSPs, MSSPs & IT service providers listed here.

Poly develops video conferencing solutions, cameras, headsets, voice and associated software. The company has been shrinking amid fierce competition and hardware supply chain pressure. Indeed, Poly's revenue was $409.6 million in Q3 of fiscal 2022, down 15.5 percent from Q3 of fiscal 2021, the company announced on February 8, 2022. The revenue shrinkage stretched across professional headsets (down 18 percent), voice (down 21 percent) and video (down 7 percent), Poly said in February 2022.

Still, HP is positioning the Poly acquisition as a growth opportunity. Indeed, HP expects to achieve $500 million of revenue synergies by FY25 and wants to accelerate Poly’s revenue growth to an approximately 15 percent CAGR (compound annual growth rate) over the first three years after closing, the buyer asserted.

HP Acquires Poly: Executive Perspectives

In a prepared statement about the deal, HP CEO Enrique Lores said:

“The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work gets done. 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.”

Added  Poly President and CEO Dave Shull:

“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.”

Although Poly may compete with Zoom on some hardware fronts, there will also be partner opportunities. Indeed, Zoom Founder and CEO Eric Yuan said:

“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.”

The deal is expected to close by the end of calendar 2022, HP and Poly indicated.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.