HP buys Plantronics in US$3.3 billion deal

(Bloomberg) — HP Inc. has agreed to purchase Plantronics Inc. in a $3.3 billion deal that will help the laptop manufacturer further capitalize on the shift to hybrid work.

The cash transaction gives Plantronics shareholders $40 per share, a 53% premium over Friday's closing price, the two companies said in a statement Monday. The price of $3.3 billion refers to the business value of Plantronics, which includes debt.

HP aims to take advantage of the growing demand for technology that connects remote workers with office staff, as companies around the world accommodate employees accustomed to the flexibility of the times of covid. The acquisition occurs as the PC giant also works to diversify beyond personal computers and printers into ancillary businesses. The acquisition of Plantronics, which sells headsets for phones and audio and video accessories, will help HP better meet customer demand, according to HP CEO Enrique Lores.

“The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work is done,” he said in a statement. “Strong technology, complementary marketing and talented Plantronics team will help drive long-term profitable growth as we continue to build a stronger HP.”

PC manufacturers, including HP and Dell, have seen an increase in sales of equipment needed to support the pandemic-driven work-from-home boom in the past year and a half. As cases of covid-19 remain low in many regions, companies have begun to plan their return to the office, which has led them to refit their workplaces with new equipment.

But Plantronics, like many companies, has seen difficulty securing components to build enough products to meet growing demand, Lores said in an interview. Combining with HP will help alleviate that problem, he added.

“Its growth has been affected by the supply chain challenge. This is where we believe that the scale we bring will help address some of these challenges,” said Lores.

HP expects to finance the deal through cash and new debt and complete its acquisition by the end of 2022, pending regulatory and shareholder approval. The firm projects annual growth for Plantronics of around 15% in the first three years after the deal closes. The transaction will be profitable immediately, Lores said, and will not affect HP's ability to continue returning cash to its shareholders.

Original Note:

HP Buys Plantronics in $3.3 Billion Deal for Work-From-Home Gear

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