Issues Letter to Polycom Board Calling for Immediate Comprehensive
Strategic Review
Believes Consolidation in UCC Sector Is Urgently Needed
Sees Potential Polycom and Mitel Combination Driving Over 80% Upside
to Polycom Stock Price by End of 2017
Today, Elliott Management Corporation (“Elliott”) disclosed active
stakes and accompanying 13-D filings in Polycom, Inc. (“Polycom”)
(NASDAQ:PLCM) and Mitel Networks (“Mitel”) (NASDAQ:MITL) and sent the
following letter to the Board of Directors of Polycom:
October 8, 2015
The Board of Directors
Polycom, Inc.
6001 America Center Drive
San
Jose, CA 95002
Attn: Peter Leav, Chief Executive Officer and
Director
Dear Members of the Board of Directors:
I am writing to you again on behalf of Elliott Associates, L.P. and
Elliott International, L.P. (together, “Elliott”
or “we”), which collectively own 6.6% of
the outstanding common stock and equivalents of Polycom, Inc. (the “Company”
or “Polycom”), making us one of your
largest stockholders. In addition, we are today disclosing an active
filing in Mitel Networks Corporation (“Mitel”), in which we are one of
the largest stockholders and with whom we have a collaborative and
productive dialogue. Our equity investments in both Polycom and Mitel
are approximately the same size at around $100 million each. In
addition, we also own stock in ShoreTel (“ShoreTel”). The investments
are related.
The purpose of today’s letter is to outline our thoughts in the
following sections:
1. Subscale Unified Communications and Collaboration (“UCC”)
Vendors Face Meaningful Challenges: Polycom, Mitel and other UCC
vendors have been challenged to maintain market share and will continue
to face a very difficult market. Such conditions have led Polycom’s
stock to meaningfully underperform all relevant metrics over all
relevant timeframes.
2. Polycom Should Undertake a Full Strategic Review:
Maintaining the status quo strategy will perpetuate Polycom’s track
record of underperformance and risk further shareholder value erosion.
In the last two years, Polycom has already responded by cutting costs,
buying back stock and changing management; none of which has generated
value to stockholders. Polycom must initiate a comprehensive review of
all strategic options, and the time for that review is now.
3. An Industry Consolidation Strategy Should Be Evaluated and
is Likely the Best Path Forward: Elliott strongly believes a
combination of mid-tier UCC vendors will create greater scale,
significant synergies and a meaningful valuation uplift for
stockholders. Elliott would be willing to provide financing for
Polycom’s acquisition of targets in the space, something we have
successfully done before.
The letter details these items in the sections below. The majority of
the letter is spent on Item 3, the “Consolidation Strategy,” which we
believe to be the most attractive path forward for Polycom, with over
80% upside to the stock. We believe that Polycom is an excellent
platform vehicle to roll up the UCC space: With significant cash flow,
net cash and a capable management team and Board, Polycom can become an
accretive M&A machine. Further, we believe the space is ripe for
consolidation – small competitors with low valuations and duplicative
cost structures create the opportunity.
Additionally, we have conveyed all of these thoughts to Mitel as well.
We have owned Mitel for years, but acquired almost all of our new
position this year based on the same thesis – that we believe Mitel is a
good platform vehicle to roll up the sector and is also an attractive
merger candidate for Polycom. Mitel has a very capable management team
led by CEO Rich McBee and CFO Steve Spooner, has engaged in successful
M&A and offers valuable tax benefits to a new combined company. We
believe that the ideal Consolidation Strategy begins with a
Polycom/Mitel combination, whether those companies stay public or go
private.
We thank Peter and the Board for their consideration of our thoughts and
look forward to our upcoming meeting.
About Elliott
Elliott is an investment firm founded in 1977 that today manages more
than $27 billion of capital for both institutional and individual
investors. We are a multi-strategy firm active in debt, equities,
commodities, currencies and various other asset classes across a range
of industries. Investing in the technology sector is one of our most
active efforts at Elliott and one in which we have built a long track
record.
Within the technology sector, we have made approximately three dozen
active investments and have successfully identified value-creating
opportunities at companies such as Citrix, BMC, Informatica, Brocade,
Riverbed, Juniper, Novell/Attachmate, Blue Coat and many others.
One key differentiating factor in Elliott’s active investments,
especially in the technology sector, is our deep focus on operations.
Our team includes experienced and proven C-level executives with
technical and operational capabilities from software and technology
companies. These executives evaluate operations, products and markets
within our investments and work to develop strategies to streamline
operations, grow revenue and create value. We also have long-lasting
engagements with leading operations consulting firms, sales and
marketing specialists, and technical consulting firms that we deploy on
our investments. Finally, in addition to our public portfolio, we have
significant investments in private technology companies, which provide
important insights into operating best practices, market trends and
general industry knowledge.
Elliott’s Approach to the UCC Sector
We have followed this industry for nearly a decade. We have previously
been stockholders in Polycom and are also long-time, passive investors
in Mitel (including when it was a private company). As mentioned, today
Elliott filed a 13D in Mitel representing a shift in our position to
take a more active role in discussions with Mitel’s management team on a
range of strategic options to create value, including the Consolidation
Strategy. Mitel, based in Canada, is a diversified provider of unified
communications and generates approximately $1.2 billion of revenue in
premise-based, hosted and mobile communications. We have deep respect
for Mitel’s ability to operate in a challenging industry and for its
perspective on consolidation in UCC.
In addition to our long-term experience following the space, we have
conducted extensive analysis on Polycom and its markets. We have
retained experts, several top-tier consulting firms, specialty industry
consultants, industry executives and investment bankers and have also
surveyed hundreds of Polycom's customers. We have spoken with executives
across the industry and developed an understanding of key purchasing
criteria, go-to-market strategies, competitive dynamics and industry
challenges.
The conclusion from all of our work is that Polycom faces a challenging
future as a standalone company; we detail these findings below. What
is unique in Polycom’s case is that the Company has already
responded with the typical value levers that underperforming companies
employ – returning significant capital to stockholders through
large buybacks, cutting costs to deliver meaningful margin improvement
and replacing management. Unfortunately, these steps have failed to
deliver returns to stockholders. The Company’s stock price is trading
near 52-week lows and has significantly underperformed all relevant
benchmarks over long-term time periods, including the period following
the Company’s management change and strategic pivot in 2013:
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Ending September 25, 2015
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Polycom's TSR Relative to:
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1 Year
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2 Years
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3 Years
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4 Years
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5 Years
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10 Years
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1. S&P 500
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(18%)
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(25%)
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(43%)
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(131%)
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(114%)
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(70%)
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2. NASDAQ Composite
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(24%)
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(34%)
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(57%)
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(145%)
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(137%)
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(122%)
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3. S&P 500 IT Index
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(22%)
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(38%)
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(42%)
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(129%)
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(122%)
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(107%)
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4. Proxy Peer Group
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(23%)
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(26%)
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(32%)
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(117%)
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(79%)
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(188%)
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Note: September 25th is the day prior to Elliott crossing 5%
ownership and beginning significant stock purchases
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Beyond stock price performance, Polycom has one of the lowest valuations
in the broad enterprise technology universe – just 5x NTM EBITDA,
reflecting a deeply cautious view of Polycom’s present and future
prospects.
In our view, the need for immediate action is clear.
Section 1: Subscale UCC Vendors Face
Meaningful Challenges
At its 2012 Analyst Day, Polycom conveyed its belief that revenue
growth would be more than 15% per year. Instead, Polycom’s
revenue has declined in each year
since this guidance was introduced to stockholders. While Company
performance has been poor, we think Polycom’s CEO Peter Leav and his
executive team are quite capable, and this decline demonstrates just how
challenging Polycom’s end-markets are and how necessary it is for the
Company to take bold action.
Market Share Challenges: The
videoconferencing market is highly competitive, and Polycom faces
intense competition from a variety of vendors, including Cisco, Avaya,
LifeSize, ZTE, Huawei and cloud-based vendors (e.g., Blue Jeans, Vidyo
and Acano). Since 2010, Polycom’s market share has steadily declined.
(Follow this link for a graphic illustration of Polycom’s market share
decline: http://www.elliott-graphics.com/graphic1.html)
Pricing Challenges: The combination
of heads-up competition against traditional vendors and fierce pricing
pressure from software-based and hosted infrastructure has led to
meaningful pricing declines in key product categories. For example,
Infonetics expects a greater than 50% pricing decline in the
multi-purpose room category between 2011 and 2019. (Follow this link for
a graphic illustration of this pricing decline: http://www.elliott-graphics.com/graphic2.html)
Competition with Cisco: Cisco is a
formidable competitor with a strong collaboration portfolio and the
ability to drive large, bundled sales through strategic customer
relationships. These relationships provide opportunities for Cisco to
successfully win sole-source deals with customers and displace
competitive vendors. Below are two relevant examples of this dynamic:
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“In the past, Polycom was our exclusive vendor for hardware equipment.
The quality is precise and sound and visuals are perfect.
Unfortunately, we are phasing Polycom out because our agency reached
an agreement with Cisco” – AV Technician, Major Government Agency
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“We use Polycom and LifeSize in addition to Cisco, but the IT group
within the hierarchy of the agency is moving closer to establishing
Cisco as our sole vendor in order to have uniformity across different
locations” – Video Conferencing Manager, Major Government Agency
In addition, Cisco’s recent product releases have led to highly
favorable customer ratings that are above Polycom’s ratings across most
categories of buying criteria. (Follow this link for a graphic
illustration of customer ratings for Cisco vs. Polycom: http://www.elliott-graphics.com/graphic3.html)
This sampling of facts is likely not surprising to you or to many of
Polycom’s investors. While the trends demonstrate the realities of
Polycom’s current position and the challenges of its current standalone
plan, we believe the right decisions today will yield significant value
for the Company and its stockholders tomorrow. However, fundamentals are
going to get harder, not easier, for Polycom. Industry pressures will
not subside, and new Polycom product releases are unlikely to reverse
long-term trends. We view these facts as an urgent
call to action.
Section 2: The Time is Now for Strategic
Change – Polycom Should Undertake a Full Strategic Review
The above challenges are significant, but the theme of mid-sized, legacy
competitors left to compete against newer upstarts and larger players
bundling products is actually a common theme in tech. The smaller, newer
players continue to take share with cheaper and simpler products while
the larger, diversified vendors use their marketing power and bundling
to squeeze out companies like Polycom.
Given the urgency of the challenges, the question is how to respond. We
have worked closely with our advisors, including well-regarded
investment bankers, to understand the options going forward. In
addition, we have had productive discussions with Mitel on these topics.
As we see it, the most relevant options for Polycom are detailed below:
1) Maintain the Status Quo: As previously described, Polycom has
already executed on the typical value levers that underperforming
companies deploy. In the last two years, Polycom has changed management,
pivoted strategy, cut costs and bought back stock. Despite all of this
effort, Polycom’s stock continues to underperform all relevant
benchmarks and is nearly the identical price to when Peter started as
CEO. Continuation of the same strategy will not achieve a different
result. The Company must do something different.
2) Buy Growth: One option is to acquire high-growth
emerging technologies and eventually integrate these technologies into
the entire portfolio. This is almost always a
value-destroying decision. For companies with legacy
technology and low valuations, the expenditure is nearly always
dilutive. As a result, whatever Polycom buys will most likely immediately
lose value – Polycom is not going to re-rate in valuation multiple just
by buying a new asset. Furthermore, given Polycom’s market position,
attractive high-growth targets (and their talented personnel) simply
will not want to be acquired by Polycom. We note that Polycom’s
historical acquisition track record has focused on these types of
high-priced acquisitions, which have generally failed to create value
(e.g., ViVu). We believe this is the wrong path
forward.
3) Go Private: The public markets generally tend to give
poor valuations to low/no-growth technology companies. Further, the
changes that need to be made in these situations are frequently best
implemented in a private-company setting. This setting also offers the
benefit of a single, large private equity investor without a primary
focus on quarterly earnings calls. We are very familiar with numerous
examples of similarly-situated companies in which stockholders have been
rewarded with a certain premium in the face of future challenges: Blue
Coat Systems, Riverbed, BMC Software, Compuware, TIBCO, Tekelec, TNS and
Websense. We believe interest in this path exists,
and we recommend that Polycom evaluate it.
4) Consolidate: The balance of this letter is devoted to
the Consolidation Strategy referenced above. It is an attractive
strategy, and Polycom is uniquely well-suited for it. The scale
benefits, efficiencies and financial merits are extraordinarily
compelling, and we have acquired stock in the UCC sector as a whole on
the basis of this industry thesis. We strongly
recommend Polycom evaluate this strategy, and we have specific thoughts
on how to pursue it.
Section 3: Consolidation in the UCC
Sector is a Compelling Path Forward
While we strongly advocate that Polycom engage in a comprehensive
strategic review of all alternatives, we believe that the Consolidation
Strategy should be one of the alternatives most thoroughly explored and
considered.
This year, we acquired stock in Mitel, Polycom and ShoreTel on the
Consolidation Strategy thesis. As we will demonstrate below, the actual
structure of any deal (consideration type, price, etc.) ends up being
far less important than the business benefits of greater
scale, industry leadership, financial synergies and diversification.
In fact, the value creation opportunity far
exceeds the standalone plan of either company. We use a
combination of Polycom and Mitel as a starting point, but we believe
many other targets should eventually be consolidated. The key benefits
of a Polycom/Mitel combination are:
1) Scale: The combination would double the scale of
Polycom to $2.5 billion in revenue. Between Mitel’s $164 million of
EBITDA in 2014 and $100 – $150+ million of
synergies available, Polycom would quickly become a $500+
million EBITDA company following a combination with Mitel. Scale
provides important competitive advantages in addition to the financial
benefits of greater diversification, stability and access to capital
markets. For example, a combination will drive greater R&D leverage to
design, engineer and build superior UCC products for customers.
2) Industry Leadership: The combined company would have
leading market share across multiple UCC categories and increase its
relevancy across its customer base. Below are the anticipated market
position statistics in the core categories:
a. #2 Global Video Conferencing
b. #1 Business Cloud Communications
c. #1 Europe IP/TDM PBX
d. #3 US IP/TDM PBX
e. #1 Microsoft Lync-Enabled Handsets
3) Complementary Products: Mitel’s strength in telephony and
mobile complements Polycom’s strength in video collaboration and group
conferencing. Product categories where Polycom and Mitel intersect offer
significant synergistic opportunities to streamline the portfolio and
select the “best of” across product categories.
4) Unified Offering: As a longer term opportunity, the
combined company can pursue the potential for a unified platform of
products. A well-integrated portfolio of premise, cloud and hybrid UCC
solutions across product categories would be positively received by
customers and make buying, installing and integrating these solutions
significantly easier. The increased scale of the combined company and
greater leverage of its R&D resources can accelerate this vision of
unified solutions and result in better products and more satisfied
customers.
a. “It was increasingly becoming part of the conversation that users
wanted to have video capability as an add-on to their UC. It
wasn’t enough to have all this unified capability just for voice, people
wanted to do that with video too. It is possible to have an
integrated ‘feel’ with using two different vendors, but it
is just easier and smoother having everything under one roof”
– Former Executive, Cisco
5) Company Culture: Mitel has already demonstrated the
benefits of pursuing a consolidation thesis over the last two years. The
Aastra transaction (discussed in the following section) serves as an
important case study, because Mitel was able to acquire a company with
the same amount of revenue and remove approximately 7.5% of the combined
cost base. We believe a similar opportunity exists today with Mitel and
Polycom.
6) Potential Incorporation Benefits: An additional and
important benefit of starting with a Polycom/Mitel combination is that
Mitel is incorporated in Canada and can provide Polycom with important
benefits. Subject to certain limitations, Polycom can maintain Mitel’s
Canadian incorporation for tax purposes and realize significant benefits
including access to and ability to deploy international cash.
We believe a transaction between Polycom and Mitel can be structured in
many ways, including as a Mitel acquisition of Polycom. As
an illustrative example, we show the pro forma financial results
and return potential of a Polycom acquisition of Mitel for $8.50 per
share in an all-stock transaction, representing a typical takeover
premium. This proposed structure allows both sets of stockholders to
benefit from the return potential of synergy realization with a pro
forma ownership split of 58% for Polycom and 42% for Mitel.
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Exhibits
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Illustrative Financial Results and Future Stock Price Performance
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($ in millions, except per share amounts)
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2016E
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2017E
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2018E
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Revenue
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$2,525
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$2,570
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$2,623
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EBITDA
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450
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581
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618
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Net Income
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282
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392
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429
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FDSO
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231
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228
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219
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EPS
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$1.22
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$1.72
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$1.96
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(x) Assumed LTM P/E Multiple
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12.0x
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12.0x
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12.0x
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Illustrative Future Share Price
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$14.75
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$20.50
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$23.50
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% Gain from Current Price(1)
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32.6%
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84.4%
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111.3%
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Note: Assumes an all-stock acquisition of Mitel at 12/31/15 for
$8.50 per share, run-rate synergies of $125mm
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phased in over 2 yrs, restructuring cash costs to achieve of 0.5x
run-rate synergies, transaction fees of 3% of
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TEV, minimum cash of $150mm. Assumes Mitel's net debt is refinanced
using cash on hand, subject to a 20%
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repatriation tax on offshore cash, and new debt raised at 5.0%.
Share prices rounded to the nearest $0.25.
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(1) Relative to Polycom's current stock price of $11.12 as of
October 6, 2015.
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As illustrated above, the upside is considerable. Polycom’s
stock can increase by over 30% to $14.75 per share by the end of 2016
and nearly 85% to $20.50 per share by the end of 2017. The
best part is that we assume the exact same multiple and absolutely no
improvement in revenue trajectory: All
of the upside comes from cost savings that we believe are readily
achievable.
In fact, the transaction is so compelling that Polycom
could pay $10.00 per share for Mitel in an all-stock transaction and
still yield a 70% return by the end of 2017 and a 95% return by the end
of 2018. Few investment opportunities exist today with this
return potential.
Further, while the upside in the transaction is significant, we also
highlight that this transaction has the benefit of risk-mitigation
through a cost synergy range of $100 – $150+ million, which provides
critical downside protection if industry challenges accelerate more than
anticipated or the macro economy turns to a recession.
We have had constructive and productive dialogue with Mitel on exactly
the same topic: There is significant and immediate opportunity for
value-creating consolidation.
Finally, we do not view this as being the end but rather the beginning
of a platform strategy for Polycom. In our example, once Mitel is fully
integrated, the combined Company should continue to acquire, rolling up
additional UCC vendors and, eventually and carefully, acquiring some
growth assets. We strongly believe Polycom will exhibit a higher
multiple and greater value creation under this strategy.
Case Studies: Consolidation is a Common Theme
in TMT
As we evaluated the Consolidation Strategy with our advisors, it became
clear that this was well-trodden ground in TMT. When faced with
challenging industry fundamentals, companies much like Polycom have
found themselves choosing to consolidate, rather than struggle as
standalone vendors, losing market share and market value.
Industry consolidation has been a positive trend in many other
industries within TMT, and companies leading the consolidation effort
have generally realized significant benefits and have generated strong
relative returns for their stockholders. We
believe the same opportunity exists in UCC.
We highlight two examples where Elliott has had direct
and successful experience using this exact strategy.
In a similar setup to the UCC space, Elliott was involved in the WAN
optimization space before it was consolidated. In 2007, Blue Coat was a
subscale vendor of proxy appliances and WAN optimization appliances.
Packeteer was its subscale competitor. Elliott believed the sector
needed to be consolidated and, as Packeteer’s largest stockholders,
helped to finance Blue Coat’s acquisition of Packeteer in 2008. Blue
Coat was able to remove costs and to increase efficiencies at Packeteer,
leading to significant value creation at the company. After closing the
deal and realizing the synergies, Blue Coat was acquired for a 30%
premium to where it was trading when the Packeteer transaction was
announced. As a private company, Blue Coat
continued its acquisition strategy and was recently sold, generating
nearly a 500% return for its investors.
In the enterprise software industry, where Elliott has a long track
record, consolidation has been an invaluable tool for low- or no-growth
software companies. One pertinent example from Elliott’s history is
Novell. We originally invested in Novell at time when Novell was deeply
underperforming and its installed base of customers was declining.
Novell ultimately sold itself to private equity-backed Attachmate Group
in November 2010 for a 45% premium to its unaffected stock price.
Elliott continued to invest through the private equity of the combined
company, which yielded a terrific outcome for the investor group when
Attachmate Group/Novell was sold to UK-based Micro Focus in 2014. Micro
Focus’s track record of acquiring and optimizing mature software
companies is impressive and serves as an outstanding example for the
benefits of a consolidation strategy. In the last ten years, Micro Focus
has acquired nine companies, culminating in the $1.2 billion acquisition
of Attachmate Group, and the company has rewarded investors with a total
return of 51% since the transaction was announced in September 2014. Over
the last decade, Micro Focus has generated a total return of over 1,600%
and an IRR of 33%.
Outside of enterprise software, one of the most important trends in TMT
is the rapid growth of over-the-top (“OTT”) video. The implications of
OTT growth on technology, media and telecom companies have been profound
and have led to a robust M&A environment. In the Pay TV industry,
companies are faced with declining video subscribers and nearly
unchecked increases in programming costs. Cable MSOs have responded with
large consolidating transactions to balance the threat from content
providers and realize the efficiency benefits of a more contiguous
footprint. Cable MSOs of all size, from the large Tier 1 providers to
small regional players, are participating in this trend and yielding
both defensive and offensive benefits. The most
notable example is Charter Communications, which is leading an
aggressive acquisition strategy and has generated a total return of over
450% over the last five years and an IRR of 42% during the period.
In addition to the Pay TV industry, the set-top box (“STB”) vendors are
similarly impacted by the dramatic growth in OTT. This example has
important relevancy because STB vendors face common challenges to UCC
players. With the combination of declining video subscribers and a
consolidating base of Pay TV operators (described in the preceding
paragraph), STB vendors have responded with transactions of their own.
Primary examples include the 2012 Arris acquisition of Motorola’s STB
business from Google, the 2015 Technicolor acquisition of Cisco’s STB
business and the 2015 Arris acquisition of Pace plc. The benefits of
these transactions have included greater scale, compelling financial
synergies, customer diversity and product diversification. In addition,
the benefits of scale are not only financial but also allow for greater
leverage of R&D budgets to design and build better products for
customers. Including the Motorola acquisition in 2012 and the Pace deal
announced in 2015, Arris has announced or
completed three significant acquisitions during the last five years and
has generated a total return of over 180% and an IRR of 23% during the
period.
Directly in the UCC space, an excellent example of the opportunity from
consolidation is Mitel’s acquisition of Aastra in 2014, as it conferred
enormous benefits on both companies. Aastra, also based in Canada, was
roughly the same size as Mitel, but with a premier franchise in Western
Europe. The combination of Mitel and Aastra created a $1 billion revenue
company with #1 market share in Western Europe and #3 market share in
North America. In addition to greater geographic diversity and increased
scale, the transaction had tremendous financial benefits. Mitel’s gross
margins exceeded Aastra’s margins by more than 1,000 basis points, while
Mitel’s EBITDA margin was 700 basis points higher. The synergy
opportunity was significant: $75 million of cost synergies, representing
approximately 7.5% of the combined cost structure. The synergy target,
which will likely be fully realized by 2016, represents more than 150%
of Aastra’s pre-transaction EBITDA. Looked at another way, Mitel
paid $290 million for Aastra (enterprise value at announcement), which
will generate about $124 million of EBITDA including synergies, a
purchase multiple of less than 2.5x EBITDA. Mitel’s
most successful acquisitions have been UCC consolidation transactions.
Another important UCC case study is ShoreTel, but for the opposite
reason. In the fall of 2014, Mitel publicly approached ShoreTel with an
offer to acquire the company and ultimately offered $8.50 per share,
representing a premium of 31% to ShoreTel’s unaffected stock price. This
offer was rejected by ShoreTel without any
engagement by the ShoreTel Board. Today, ShoreTel trades at $7.80 per
share, well below Mitel’s offer one year ago.
A combination between Mitel and ShoreTel made sense a year ago, and
ShoreTel would still be a compelling acquisition target for a combined
Polycom/Mitel as it executes on its Consolidation Strategy.
Next Steps and Timing
As we have already communicated to you, we look forward to a
collaborative dialogue with Peter and the Board at our upcoming meeting.
We have previously established a collaborative dialogue with Mitel,
which we now intend to actively pursue, and hope we can achieve the same
with Polycom. Our letter today reiterates our prior call for Polycom to
hire financial and legal advisors to promptly
engage in a full strategic review, including a thorough evaluation of
the Consolidation Strategy. We hope that the Company embraces this
opportunity for positive dialogue and works together with us to deliver
a terrific result.
It is our sincere hope that our conviction in the benefits of the
strategy outlined in this letter is evident, as we have filed on two
companies today and own stock in other peers. In our view, the value is
clear, and the upside potential and downside mitigation are inarguable.
Finally, I’d like to reiterate that we think very highly of Peter and of
Polycom’s Board. We know most of you, and we hope that you find this
letter compelling. There is a significant value creation opportunity,
and failure to act on these bold steps will likely result in
unattractive outcomes for stockholders. I hope we can work together to
achieve an exciting, value-maximizing outcome.
Thank you very much for your time and consideration. We greatly look
forward to our upcoming meeting.
Best regards,
Jesse Cohn
Senior Portfolio Manager
Cautionary Statement Regarding Forward-Looking Statements
The information herein contains “forward-looking statements.” Specific
forward-looking statements can be identified by the fact that they do
not relate strictly to historical or current facts and include, without
limitation, words such as “may,” “will,” “expects,” “believes,”
“anticipates,” “plans,” “estimates,” “projects,” “targets,” “forecasts,”
“seeks,” “could,” “should” or the negative of such terms or other
variations on such terms or comparable terminology. Similarly,
statements that describe our objectives, plans or goals are
forward-looking. Our forward-looking statements are based on our current
intent, belief, expectations, estimates and projections regarding the
Company and projections regarding the industry in which it operates.
These statements are not guarantees of future performance and involve
risks, uncertainties, assumptions and other factors that are difficult
to predict and that could cause actual results to differ materially.
Accordingly, you should not rely upon forward-looking statements as a
prediction of actual results and actual results may vary materially from
what is expressed in or indicated by the forward-looking statements.
About Elliott Management Corporation
Elliott Management Corporation manages two multi-strategy hedge funds
which combined have more than $27 billion of assets under management.
Its flagship fund, Elliott Associates, L.P., was founded in 1977, making
it one of the oldest hedge funds under continuous management. The
Elliott funds' investors include pension plans, sovereign wealth funds,
endowments, foundations, funds-of-funds, high net worth individuals and
families, and employees of the firm.
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