HP Inc. (NYSE: HPQ) announced it has completed the acquisition of Poly, a global leader in workplace collaboration solutions.
The transaction is expected to accelerate HP’s strategy to create a more growth-focused portfolio, further strengthen its industry opportunity in hybrid work solutions, and position the combined organization for long-term sustainable growth and value creation. HP expects the transaction, which was first announced in March, to result in fiscal 23 post-merger revenue growth, non-GAAP operating income and non-GAAP EPS.
“This is a historic day for our company as we mark the merger of two legendary companies that are innovating at the heart of hybrid work,” said Enrique Lores, HP President and CEO. “Poly brings incredibly strong talent, differentiated technology and a complementary go-to-market system that we believe will further strengthen our position in large and growing markets. Together we will have tremendous opportunities to innovate for customers and grow our business as we continue to build a stronger HP.”
The HP and Poly merger comes as companies and their employees focus on finding better ways to work and collaborate in the hybrid world. Approximately 75% of office workers invest in improving their home furnishings1. Traditional office spaces are also being reconfigured to support hybrid working and collaboration, with a focus on meeting room solutions. There are currently more than 90 million rooms, less than 10% of which are video enabled2. As a result, the meeting room office solutions segment is expected to triple by 2024.
Poly brings industry-leading video conferencing solutions, cameras, headsets, voice and software to HP, enabling customers to create meeting equity between those in the room and those not present. The combined organization will provide a complete ecosystem of devices, software and digital services to create best-in-class employee experiences, improve employee productivity and provide enterprise customers with better visibility, insights, security and manageability across their hybrid IT environments.
“As perceptions of the role of the traditional office continue to evolve, there is a critical need for organizations to enable rich collaboration experiences between on-site and remote workers,” said Patrick Moorhead, CEO and principal analyst, Moor Insights & Strategy . “The combination of Poly and HP is a win-win for both organizations. More importantly, bringing these two companies together will provide end users with the essential hardware, software and services needed to successfully navigate hybrid work environments now and into the future.”
The addition of Poly will help HP drive innovation and scale in two of its key growth areas: peripherals and workforce solutions. Peripherals represent a $110 billion segment opportunity growing at 9% annually, driven by the need for more immersive experiences2. Workforce solutions represent a $120 billion segment opportunity, growing at 8% annually as organizations invest in digital services to deploy, manage, and secure more distributed IT ecosystems 2.
Upon closing of the transaction, Poly CEO Dave Shull will join HP effective November 1 as President, Workforce Services & Solutions. Shull will lead the newly formed organization focused on driving a more expansive growth agenda across HP’s commercial services business. He brings extensive global experience in technology, digital media, operational transformation and business development to the role. Shull will join HP’s leadership team and report to Lores.
Andy Rhodes will lead the combined HP-Poly business as General Manager, Hybrid Work Solutions & Peripherals. Rhodes, who joined HP in 2018, previously led the company’s commercial personal systems business and built the global peripherals organization. Prior to HP, he held a variety of leadership positions at Dell. Rhodes will continue to report to HP Personal Systems President Alex Cho.
HP completed the transaction as an all cash transaction at $40 per share, implying an aggregate enterprise value of approximately $3.3 billion including Poly’s net debt. The transaction was funded through a combination of on-balance sheet cash and new debt.
HP Inc. is a technology company that believes that a well thought out idea has the power to change the world. Personal Systems’ portfolio of products and services, printers and 3D printing solutions help bring these ideas to life. Visit http://www.hp.com.
Cautionary Note Regarding Forward-Looking Statements
This document contains statements, estimates, forecasts or guidance that constitute forward-looking statements within the meaning of the federal securities laws and are based on current expectations and assumptions that involve risks and uncertainties. Should the risks or uncertainties ever materialize, or should the assumptions prove incorrect, results could vary materially from those expressed or implied by such forward-looking statements and assumptions. All statements, other than statements of historical fact, are statements that may be deemed to be forward-looking statements, including, but not limited to, statements regarding the transaction between HP and Poly, including any statements regarding the expected benefits of the transaction (including anticipated incremental of revenues and free cash flow and projected EBITDA), the impact of the transaction on HP’s business, the synergies from the transaction, future opportunities and any other statements regarding HP’s future expectations, beliefs, plans, goals, results of operations, financial condition and cash flows or future events or performances. Words or phrases such as “future”, “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “aim”, “advance”, “commit”, “drive”, “intend”. “, “forecast”, “aims”, “aims”, “plans”, “predicts”, “projects”, “will”, “would”, “could”, “should”, “can”, “may”, “Outlook”, “guidance”, “goals”, “goals”, “strategies”, “opportunity”, “potential” and similar words or phrases are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond the companies’ control and are difficult to predict. As a result, actual outcomes and results could differ materially from those expressed or projected in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of these statements. Except as required by law, HP undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the impact of disruptions to HP’s or Poly’s respective businesses; the impact of this announcement on HP’s stock price and Poly’s ability to retain key personnel and maintain relationships with its customers, suppliers and other business partners; the effects of industry, market, economic, political or regulatory conditions beyond HP’s control; HP’s ability to realize the synergies and benefits of the transaction, including business and technology integration; the risk that the integration of HP and Poly’s operations will be materially delayed, more costly or more difficult than anticipated; the nature, cost and outcome of litigation and other legal proceedings; the risk that cost savings, revenue synergies and other anticipated benefits of the transaction may not be realized or may take longer than expected to be realized, including as a result of the impact or issues arising from the integration of the two companies; and unknown liabilities. Other important factors that could cause actual results to differ materially from those in the forward-looking statements are described in HP’s filings with the SEC, including its Annual Report on Form 10-K for the year ended October 31, 2021 Fiscal year in Poly’s filings with the SEC, including its annual report on Form 10-K for the fiscal year ended April 2, 2022. Other unpredictable or unknown factors not discussed in this document could also have a material adverse effect on any forward-looking statements.
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