Why Would Plantronics Buy Polycom?
by Jim Lundy
Headset maker Plantronics made a major move on March 28th, 2018 when it announced it was buying Polycom for $U.S. 2 billion, the same price that Siris Capital paid when it bought Polycom in 2016.
Why Sell Polycom?
We suspect that Siris Capital decided to sell Polycom because Siris had made enough money from the asset and decided that it was time to sell. Another option is that Siris may have discovered that maintaining an up-to-date fleet of endpoints is costly, so exiting the market now with a strong set of endpoints makes sense.
We also think that Siris did some major financial engineering to lower debt by opting to run a leaner organization and sell off assets, such as the remnants of its video content management product line. Ultimately, given all the work Siris did, it made money on the deal.
Plantronics is best known for its portfolio of headsets. There is synergy with Polycom, which has a set of patented sound management offerings and some world-class endpoints. This is a major expansion for Plantronics, which now has headsets, phones, and video endpoint offerings for its distribution channel.
Avaya Set a Standard
Like Avaya, which just rehired a slew of its former executives since emerging from bankruptcy, Plantronics may want to rehire some recently departed talent, like Michael Frendo, who most recently was the SVP of Worldwide Engineering. The other key thing for Plantronics will be to ensure that critical staff stay in place.
No Expected Changes in Partnerships
We don’t see any change in the strategic partnership with Microsoft; Aragon anticipates that business will remain the same. That said, Microsoft is not slowing down on expanding its partnerships for Microsoft Teams and Skype for Business.
The Future of Plantronics
The new Plantronics is about voice, video, and endpoints, but Plantronics has a lot to learn. The video conferencing market is competitive, and it can be challenging to develop strong endpoints. However, the Polycom portfolio is strong, and this gives Plantronics time to solidify its strategy.