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HP bets big on future of hybrid work with $3.3bn Poly buy

Plantronics and Polycom have a new parent company

HP Inc sees the future of its business as one supporting a workforce partially based at home and partially in the office, and appears to have bought office telecom giant Poly for that reason.

Formerly known as Plantronics, Poly changed its name shortly after it acquired Polycom in 2018. HP didn't mention in its acquisition announcement whether or not it would keep the Poly brand separate, but it's still early: the deal is not expected to close until the end of the 2022 calendar year. 

HP described the $3.3 billion purchase ($40 per share) as a bid to refocus its portfolio on growth and take advantage of what it said is a massive growth opportunity due to the likely permanence of hybrid work. 

Seventy-five percent of office workers, HP said, are continuing to invest in their home office setup "to support new ways of working," which in turn triggers a transformation in businesses' own offices as they rush to turn meeting rooms into hybrid-capable spaces.

"Currently, there are more than 90 million rooms, of which less than 10 percent have video capability. As a result, the office meeting room solutions segment is expected to triple by 2024," HP said. 

Plantronics and Polycom have long had a considerable presence in the enterprise space, with Polycom's and Plantronics video conferencing hardware and headsets likely familiar to people in the world of work.

Plantronics itself has a history reaching back to early airline headsets and the Apollo 11 mission: It's a Plantronics headset that relayed Neil Armstrong's "one small step" back to Earth.

The value of peripherals like headsets hasn't declined in the years since, with HP saying the peripheral market is growing 9 percent annually and is worth $110 billion. Workforce solutions, like conference room telecom equipment, represents a $120 billion market segment that HP said is growing 8 percent yearly.

HP expects the acquisition to boost its revenue growth, margins and non-GAAP EPS as soon as it's completed. It further predicts "$500 million of revenue synergies by FY25 and Poly's revenue growth [accelerating] to an approximately 15 percent CAGR over the first three years after closing." 

With those figures in mind, HP CEO and president Enrique Lores said that the purchase will make HP more profitable and stronger in the long term, and expanding into hybrid environments is a chance it can't pass up. "The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work gets done," Lores said. ®

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