HP Inc. plans to acquire workplace-technologies company Poly Inc. as the company looks to enhance its hybrid-work offerings.
The personal-computer giant said Monday that it intended to purchase Poly POLY,
Shares of Poly, which carries the corporate name Plantronics Inc., were up nearly 50% in premarket trading Monday.
Poly makes a variety of products including headsets, conference phones, and videoconferencing tools. Based on 42.8 million shares outstanding as of Feb. 3, HP’s per-share bid implies a market capitalization for Poly of $1.71 billion.
Through the deal, HP sees a wider opportunity to tap into a pandemic-driven wave of office redesigns, as businesses look to better outfit meeting rooms with videoconference offerings and other products that are compatible with hybrid work cultures.
The company cited statistics from Frost & Sullivan indicating that less than 10% of the 90 million-plus meeting rooms have video compatibility, supporting expectations for a tripling of the market for office meeting-room technology by 2024.
“The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work gets done,” HP Chief Executive Enrique Lores said in a release. “Combining HP and Poly creates a leading portfolio of hybrid work solutions across large and growing markets.”
HP anticipates that the acquisition will be immediately accretive to its revenue growth, adjusted earnings, and margins when it closes. The company is targeting $500 million in revenue synergies by fiscal 2025, and it also sees opportunities to improve Poly’s operating margins through scale efficiencies.
The company plans to finance the deal using both balance-sheet cash and new debt.
Poly’s stock had dropped 34.1% over the past 12 months through Friday, while HP shares haves rallied 25.8% and the S&P 500 index SPX,