Company to Buy Back $400 Million of Stock Funded with Cash and $250
Million of Debt
Polycom, Inc. (Nasdaq: PLCM), the global leader in open,
standards-based unified communication and collaboration (UC&C), today
announced that its Board of Directors has authorized the repurchase of
$400 million, or approximately 20 percent of the Company's outstanding
common stock, through a $250 million modified "Dutch Auction"
self-tender offer and subsequent open market purchases or privately
negotiated transactions. This action is consistent with Polycom's
continuing commitment to delivering value to shareholders, as discussed
on the Company's Second Quarter 2013 conference call. The Company
expects to fund the program with $150 million in cash and a new $250
million term loan. The Company intends to launch the tender offer on
September 13, 2013, and expects it will expire on October 30, 2013.
"Today's announcement underscores our confidence in the company's
business, our market position and the long-term growth potential of our
industry," stated Kevin Parker, Chairman of the Board and Interim CEO.
"We intend to create significant value for shareholders as we realize
the potential of the strategic investments we're making in the business,
streamline operations and deploy our capital resources and balance sheet
to maximize return."
Polycom has retained Morgan Stanley Senior Funding, Inc. as sole lead
arranger and joint bookrunner for a new term loan facility, which will
bear interest at LIBOR plus 1.75% and carry a maturity of five years.
Closing and funding of the term loan is scheduled to be completed on
September 13, 2013, subject to the execution of definitive documentation
and the satisfaction of customary closing conditions.
Polycom intends to commence the $250 million self-tender offer at a
price of not less than $10.00 and not more than $11.50 per share and, at
the midpoint of such range, expects to purchase approximately 23 million
shares. The self-tender offer is expected to commence on Friday,
September 13, 2013, and expire at 5:00 pm, Eastern Daylight Time on
Wednesday, October 30, 2013, unless extended. Polycom has retained
Morgan Stanley & Co. LLC as the dealer manager for the self-tender
offer. LionTree Advisors is acting as capital markets advisor in
connection with the overall transaction, including the contemplated
financing and return of capital.
The Company expects to utilize the remaining approximately $150 million
of the new $400 million share repurchase authorization for open market
share repurchases or privately negotiated transactions. Polycom has
repurchased $84 million of common stock in the first and second quarters
of 2013. All buybacks are expected to be completed within one year.
This $400 million share repurchase authorization will supersede any
remaining outstanding share repurchase authorization as of the
commencement of the tender offer. The Company's remaining repurchase
authorization was $89 million as of June 30, 2013. The repurchases will
be made in compliance with, and at such times as permitted by, federal
securities law. As of June 30, 2013, the Company had approximately $694
million of cash and investments.
The tender offer described in this release has not yet commenced. This
press release is for informational purposes only and is not an offer to
buy or the solicitation of an offer to sell any shares of common stock.
The solicitation and offer to buy common stock will only be made
pursuant to the offer to purchase and the other tender offer documents,
which are expected to be distributed to stockholders on or about
September 13, 2013. A free copy of the tender offer documents that will
be filed by Polycom with the Securities and Exchange Commission (SEC)
may be obtained when filed from the SEC's website at www.sec.gov
or from Polycom's website at www.polycom.com.
In addition, stockholders will be able to obtain a free copy of the
tender offer documents, when available, from the information agent named
in the offer to purchase. Stockholders are urged to read these
materials, when available, carefully prior to making any decision with
respect to the offer.
Polycom is the global leader in open, standards-based unified
communications and collaboration (UC&C) solutions for voice and video
collaboration, trusted by more than 415,000 customers around the world.
Polycom solutions are powered by the Polycom® RealPresence® Platform,
comprehensive software infrastructure and rich APIs that interoperate
with the broadest set of communication, business, mobile and cloud
applications and devices to deliver secure face-to-face video
collaboration in any environment. Polycom and its ecosystem of over
7,000 partners provide truly unified communications solutions that
deliver the best user experience, highest multi-vendor interoperability,
and lowest TCO. Visit www.polycom.com
or connect with us on Twitter,
to learn how we're pushing the greatness of human collaboration forward.
Forward Looking Statements and Risk Factors:
This release contains forward-looking statements, including those
regarding the timing of closing the term loan facility, timing of
commencing and closing the tender offer, terms and conditions of the
tender offer, sources of funding for the tender offer, additional
repurchases of our common stock following the closing of the tender
offer and value creation for our shareholders. The actual timing, size
and success of the planned tender offer and additional repurchases of
our common stock are subject to a number of factors, including (1)
developments or changes in economic or market conditions, (2)
developments or changes in the securities markets, (3) developments or
changes in the business or condition of the Company or in our cash
flows, (4) developments or changes in our ability to obtain debt
financing under the term loan facility to fund the proceeds for the
tender offer, and (5) the factors identified under "Risk Factors" in the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2013, and in other reports filed by Polycom with the SEC. Polycom
disclaims any intent or obligations to update these forward-looking
© 2013 Polycom, Inc. All rights reserved. POLYCOM®, the Polycom logo,
and the names and marks associated with Polycom's products are
trademarks and/or service marks of Polycom, Inc. and are registered
and/or common law marks in the United States and various other
countries. All other trademarks are property of their respective owners.
Laura Graves, 1-408-586-4271
Shawn Dainas, 1-408-586-3768