A couple of days ago the internet was taken over by storm as the news of HP acquiring Poly started to circulate. On Monday, March 28th 2022, HP announced that they are acquiring the audio and video solution company, Poly, for $1.7 billion in cash as it looks to capitalise on the hybrid work led boom in demand for electronic products.
HP's objective to build a more growth-oriented portfolio is accelerated by this purchase, which increases the company's industry opportunity in hybrid work solutions and prepares it for long-term sustainable development and value creation.
HP's objective to build a more growth-oriented portfolio is accelerated by this purchase, which increases the company's industry opportunity in hybrid work solutions and prepares it for long-term sustainable development and value creation.
HP Chief Executive Officer Enrique Lores said:
"The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work gets done,"
Poly will assist with driving the development and size of HP's peripherals and workforce solutions companies' expansion and scalability. Peripherals are a $110 billion market with a 9% annual growth rate, driven by the demand for more immersive experiences. Poly's devices, programming and services, joined with HP's strength across computation, device management, and security, makes a vigorous arrangement of half and half gathering arrangements. 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.
HP expects the transaction to be immediately accretive to HP’s revenue growth, margins, and non-GAAP EPS at close. HP will actually want to strategically pitch across its worldwide business and buyer deals channels, while driving steady deals from joining Poly's items with HP's PC portfolio. Therefore, HP hopes to accomplish $500 million of income collaborations by FY25 and speed up Poly's income development to a roughly 15% CAGR over the initial three years in the wake of shutting. What's more, HP anticipates that the exchange should further develop Poly's working edges by around six rate focuses from current levels by FY25, thanks to scale economies in the supply chain, manufacturing, and overhead.
Poly, whose shares rose 49% in premarket trade, said it would be required to pay a fee of $66 million if the deal is terminated. The transaction is expected to close by the end of 2022 and is subject to approval from Poly shareholders.
HP said it will fund the acquisition through a combination of cash and new debt. The PC vendor will pay $1.7bn and also take on Poly’s debt.