Company Announces Increase in Share Repurchase Authorization
PLEASANTON, Calif. - May 10, 2012 : Polycom, Inc. (Nasdaq: PLCM), the global leader in open standards-based unified communications (UC), today announced a definitive agreement to divest its enterprise wireless voice solutions business to an affiliate of Sun Capital Partners, Inc. (“Sun Capital”) for gross proceeds of approximately $110 million in cash, subject to certain adjustments set forth in the agreement. The sale is expected to close within the third quarter of 2012, following the satisfaction of regulatory requirements and other customary closing conditions. Polycom’s Board of Directors has approved an increase in its current share repurchase authorization to include net proceeds of approximately $104 million from this transaction, contingent upon the sale of the enterprise wireless voice solutions business and receipt of the net proceeds from the sale.
“Polycom has evolved rapidly over the last 18-24 months, and taken actions designed to capture and lead the fast-growing video collaboration market through traditional and new delivery platforms including mobile, social and cloud. The sale of our wireless handset business is a further step toward focusing our product and technology portfolio on our core unified communications and video collaboration solutions, including extending the reach of the Polycom® RealPresence® Platform,” said Andy Miller, President and CEO of Polycom. “The closing of this transaction will allow Polycom to concentrate on initiatives that support our vision of making video collaboration ubiquitous through open, standards-based software delivered to anyone, across any environment and device. Moreover, the divestiture of the enterprise wireless voice solutions business will allow us to focus on the stronger sales growth and higher gross margins of Polycom’s core unified communications business.”
This strategic decision to divest the wireless voice business reflects Polycom’s focus on initiatives that extend the company’s leadership in its unified communications business. Polycom’s enterprise wireless voice portfolio, which is part of the UC personal product category, includes Wi-Fi and DECT handsets, related infrastructure and accessories, and generated revenues of approximately $94 million in calendar year 2011.
“This is a logical next step for our business and a strategic decision that should enable the wireless voice organization to flourish as a standalone company,” continued Miller. “Polycom has selected Sun Capital because of its commitment to support Polycom’s wireless handset partners and customers, as well as its strong operational expertise, particularly in corporate divestitures that require seamless transfers of significant business operations.”
“This is a good and not surprising move for Polycom, as it allows them to concentrate their energy and resources on the core, strategic components of their business in order to drive further innovation and adoption of video collaboration,” said Rich Costello, IDC senior research analyst.