Plantronics announced that it has completed its acquisition of Polycom. The acquisition of Polycom will accelerate and expand Plantronics’ vision and enable it to deliver the broadest portfolio of endpoints in the Unified Communications and Collaboration (UCC) ecosystem.
UCC and team collaboration technology are unlocking human potential at work and at home. With this acquisition, Plantronics is focused on voice, video, content, and cloud solutions for every place that technology touches people as they work, share, collaborate, and play.
As trends in enterprise communications move toward open workspaces and flexible work arrangements, the ecosystem of platforms and devices continues to expand. With the addition of Polycom’s leading portfolio, Plantronics can offer a premium experience regardless of the UCC solutions selected by the customer.
Plantronics expects the acquisition to be immediately accretive to Non-GAAP earnings per share and believes it can achieve annual run-rate cost synergies of $75 million within 12 months. Non-GAAP earnings per share may exclude charges related to stock-based compensation, purchase accounting adjustments, acquisition and integration costs, restructuring and other related charges, litigation settlements, as well as the tax impact of these items and any discrete tax adjustments.
Under terms of the acquisition agreement, Plantronics acquired Polycom at a $2.0 billion enterprise value with the total consideration consisting of approximately $1.638 billion in cash and 6.352 million Plantronics shares, resulting in Triangle Private Holdings II, LLC, which was Polycom’s sole shareholder, owning approximately 16.0% of Plantronics following the acquisition.
Under the terms of the transaction, Frank Baker, Co-Founder and Managing Partner, Siris Capital Group (an affiliate of Triangle Private Holdings II, LLC), and Daniel Moloney, Executive Partner, Siris Capital Group, were appointed to Plantronics Board of Directors and have been nominated for election by Plantronics’ stockholders at the 2018 Annual Meeting of Stockholders.
In conjunction with the closing of the acquisition, Plantronics today completed the financing of the transaction through a $1.275 billion term loan priced at LIBOR plus 250 bps, maturing in July 2025 (“Term Loan”). Proceeds of the Term Loan, along with cash on hand, were used to finance the acquisition as well as pay related fees and expenses. Additionally, Plantronics concurrently replaced its existing $100 million credit facility with Wells Fargo Bank, N.A. (“Wells Fargo”), with a new $100 million credit facility.
Wells Fargo led the new Term Loan facility, as well as the replacement of the existing credit facility and will act as administrative agent for both the Term Loan and new credit facility. Foley & Lardner LLP acted as outside legal counsel for Plantronics. Further details regarding the terms of the Term Loan and new credit facility are outlined in Plantronics’ Current Report on Form 8-K to be filed today with the Securities and Exchange Commission.