March 28, 2018 / 11:37 AM / 3 months ago

UPDATE 2-Plantronics to buy video conferencing gear maker Polycom for $2 bln

(Adds background on industry, details on deal)

March 28 (Reuters) - Headsets maker Plantronics Inc said on Wednesday it would buy video conferencing equipment maker Polycom in a $2 billion deal, as it aims to take a bigger share of the market for providing businesses with a one-stop shop for managing their communications.

The deal will help Plantronics offer messaging systems, email, conferencing, telephone and services in a single system, a market it said was worth $40 billion.

The cash-and-stock deal comprises about $948 million in cash and Plantronics shares worth $358 million, as well as $690 million in debt.

Polycom was taken private in 2016 by Siris Capital Group for $1.7 billion, ending a three-month old deal with Canada’s Mitel Networks Corp.

Polycom shareholders will own about 16 percent of the combined company.

The transaction is expected to immediately add to Plantronics' adjusted earnings, and will save $75 million annually within one year of the deal's closing.

Plantronics said it intends to fund the cash portion of the offer with cash on hand and about $1.375 billion in debt financing.

Siris Capital's founder and managing partner, Frank Baker, and its executive partner, Daniel Moloney, will join Plantronics board.

The deal has been unanimously approved by the boards of both the companies, and is expected to close by the end of the third quarter of 2018.

Wells Fargo Securities is the lead financial adviser to Plantronics and Foley & Lardner LLP is the legal adviser.

Moelis & Co LLC and Macquarie Capital are financial advisers to Polycom, while Sidley Austin LLP its legal adviser. (Reporting by Sonam Rai in Bengaluru Editing by Saumyadeb Chakrabarty)

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