Acquisition is a win for shareholders, yet one company deals with value-based products and the other with premium gear, and that’s a tough combination to mix.
In a surprise move, Hewlett Packard announced a definitive agreement to acquire Poly, a vendor of workplace collaboration solutions for $3.3B in cash, which is inclusive of about $1.6B in debt. This marks the end of an era for Poly, formerly Polycom, which was one of the pioneers of videoconferencing. The current Poly company is a combination Polycom business and Plantronics, which acquired the video vendor in 2018. Later that year, Logitech attempted to purchase Poly, but the deal fell apart at the 11 th hour. This week’s news combines the collaboration endpoint business of Poly with the office equipment, primarily printers and PCs, of HP. On paper, this makes some sense as businesses will be looking to refresh office equipment in preparation for hybrid work. In the news release, Enrique Lores, President and CEO of HP, stated, “The rise of 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.” Breaking down this quote, I’m in full agreement that hybrid work creates an unprecedented opportunity to redefine the way people work. I’m less bullish that the combined company can capitalize disproportionally on this “rising tide.” It’s important to note that it’s HP, Inc., and not HP Enterprise (HPE) that is acquiring Poly. HPE’s portfolio is strategic technology, comprised of network infrastructure via its acquisition of Aruba Networks, which includes Wi-Fi,5G and SD-WAN, AI/ML and data analytics, data center infrastructure and a broad range of cloud services. In contrast, HP is largely comprised of commodity hardware like printers, laptops, desktops, and peripherals. Poly has historically been known as a high-end, premium price vendor, although it has been trying to move down market.
