Verizon jumps on the video conferencing bandwagon with BlueJeans acquisition

Unperturbed by its rubbish M&A track record, US operator Verizon thinks this is a good time to be in the video conferencing game.

BlueJeans Network focuses on B2B video conferencing, but is a relatively small player compared to the likes of Zoom. This is reflected in a reported selling price of around $400 million, which is a hundredth of Zoom’s current market cap. Having said that, with all the fresh challenges its sudden surge in popularity have created, that valuation is proving volatile.

The plan is to merge the BlueJeans cloud platform with Verizon’s unified communications as-a-service offering as soon as the deal is complete. This would appear to represent a pivot towards B2B by Verizon, following its disastrous acquisitions of AOL and Yahoo. It also seems to mark the end of Verizon’s bizarre fetish for antiquated internet companies.

“As the way we work continues to change, it is absolutely critical for businesses and public sector customers to have access to a comprehensive suite of offerings that are enterprise ready, secure, frictionless and that integrate with existing tools,” said Tami Erwin, CEO of Verizon Business. “Collaboration and communications have become top of the agenda for businesses of all sizes and in all sectors in recent months. We are excited to combine the power of BlueJeans’ video platform with Verizon Business’ connectivity networks, platforms and solutions to meet our customers’ needs.”

“The combination of BlueJeans’ world class enterprise video collaboration platform and trusted brand with Verizon Business’ next generation edge computing innovation will deliver highly differentiated and compelling solutions to our joint customers,” said Quentin Gallivan, CEO of BlueJeans Network. “We are very excited about joining the Verizon team and we truly believe the future of business communications starts today!”

Not everyone is quite as excited about the move however, as the following selection of commentator tweets shows.

It’s hard to be too down on Verizon for buying into an ultra-hot sector at a relatively low price. The chances of the move succeeding are significantly improved by the fact that it will be absorbed into a larger package rather than maintained as a standalone service. There is a strong chance that the move towards remote working forced by the coronavirus pandemic will become permanent, which should make unified comms a more valuable resource. If so, Verizon seems to have put itself in a stronger position to exploit that trend with this move.

Plantronics gets rolling on $2 billion Polycom acquisition

Plantronics has announced it will acquire unified communications specialist Polycom in a cash and stock transaction worth $2 billion, expected to close by the end of the third quarter.

The pair claim the deal will create the broadest portfolio of communications and collaboration endpoints for the $39.9 billion UCC industry, adding voice and video collaboration expertise to the Plantronics strategy of ‘delivering new communications and collaboration experiences’. Bringing the two companies together will enable Plantronics to target new opportunities in the data analytics and insight services segments, the company said.

“Polycom has returned to growth by focusing on building strong ecosystem partnerships and delivering innovative, smart solutions for our customers and partners,” said Mary T. McDowell, CEO of Polycom. “Bringing Plantronics and Polycom together will broaden the breadth of solutions available to customers and partners and create a consistent end-user experience across many collaboration applications and devices. As one company, Plantronics and Polycom will make it even easier for all customers to solve big-business problems through human-to-human connections.”

“With the addition of Polycom’s solutions across video, audio and collaboration we will be able to deliver a comprehensive portfolio of communications and collaboration touch points and services to our customers and channel partners,” said Joe Burton, CEO of Plantronics. “This will put Plantronics in an ideal position to solve for today’s enterprise collaboration requirements while capitalizing on market opportunities associated with the evolving, intelligent enterprise.”

In terms of the specifics, the $2 billion will consist of an estimated $690 million in net debt and an estimated $948 million in cash and 6.352 million Plantronics shares, valued at $362 million based on the 20 trading day average. Polycom shareholders will own approximately 16% of the combined company. Siris’ Capital’s (an investor in Polycom) Frank Baker, Managing Partner, and Daniel Moloney, Executive Partner, will join Plantronics Board of Directors.

This is not the first time Polycom has been in the news regarding an acquisition. Back in 2016, Polycom was the centre of consolidation talk with Mitel, though the pair parted ways after Polycom received a superior offer from Siris Capital.