HP to acquire Palm for $1.2 billion

HP and Palm have announced that they have entered into a definitive agreement under which HP will purchase Palm, a provider of smartphones powered by the Palm webOS mobile operating system, at a price of $5.70 per share of Palm common stock in cash or an enterprise value of approximately $1.2 billion. The transaction has been approved by the HP and Palm boards of directors.

The combination of HP’s global scale and financial strength with Palm’s unparalleled webOS platform will enhance HP’s ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets. Palm’s unique webOS will allow HP to take advantage of features such as true multitasking and always up-to-date information sharing across applications.

“Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices,” said Todd Bradley, executive vice president, Personal Systems Group, HP. “And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market.”

“We’re thrilled by HP’s vote of confidence in Palm’s technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre. HP’s longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS,” said Jon Rubinstein, chairman and chief executive officer, Palm. ”We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners.”

Under the terms of the merger agreement, Palm stockholders will receive $5.70 in cash for each share of Palm common stock that they hold at the closing of the merger. The merger consideration takes into account the updated guidance and other financial information being released by Palm this afternoon. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Palm’s stockholders. The transaction is expected to close during HP’s third fiscal quarter ending July 31, 2010.

Carolina Milanesi, research VP, mobile devices, technology and service provider research, at Gartner, commented: “We believe HP’s purchase of Palm shows a clear intention to enter the consumer mobile device market. The pairing has merit: HP brings financial strength and broad reach; Palm brings a set of consumer-focused hardware, OS, application store and intellectual property. HP has made a clear commitment to invest in Palm’s technologies and has hinted at ambitious plans. But neither Palm nor HP have a strong presence in the consumer market. Most significantly they lack momentum around mobile application stores and a developer ecosystem. It will take time for HP to build up such an ecosystem, and it faces extremely strong competitors like Apple, Research In Motion and Android. The consumer smartphone market moves quickly and HP will have to act fast.”

Palm’s current chairman and CEO, Jon Rubinstein, is expected to remain with the company.

The following two tabs change content below.

admin

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam dignissim magna vitae dui posuere eu feugiat augue eleifend. Fusce sed tincidunt quam. Donec varius aliquam metus ut semper. Donec augue purus, feugiat interdum malesuada vel, aliquet quis massa. Nulla facilisi. Nam vel ante quam, et tincidunt dui. Maecenas venenatis libero eu nulla tincidunt et accumsan velit sodales. Nam congue mauris et felis porttitor blandit. Nam eget tempor massa. Nullam suscipit gravida eros, ac suscipit magna feugiat sit amet.

Latest posts by admin (see all)