HP Buys Palm in Definitive Agreement Costing $1.2 Billion
Well, wow. Here we go, folks. It was just inevitable, apparently. Even if other companies were dropping away from the deal, it seems that one company (not Lenovo) stuck it out through to the end. And, just . . . Wow. Here’s the deal: HP has bought Palm. The deal has equaled $1.2 billion, or $5.70 per share within the common stock. The deal is just in its infancy, so to speak, but it’s set to close by July 31st.
That date should be interesting to note, because it’s the end of HP’s third fiscal quarter, and should mark a “starting point” for the rest of the year, as the months progress. At the end of the press release, in perhaps not so much as “definitive terms,” it clearly notes that Jon Rubinestein is expected to remain with the company. And, we hope that’s the case, because the man behind webOS should be allowed to see it to the end.
The details are still coming, so for now, read the press release and take it all in. There’s a press call at 5PM ET, and hopefully some more details will get out. And if they do, we’ll bring them your way. Press release below.
PALO ALTO, Calif. & SUNNYVALE, Calif.–(BUSINESS WIRE)–HP (NYSE: HPQ – News) and Palm, Inc. (NASDAQ: PALM – News) today 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.
Palm’s current chairman and CEO, Jon Rubinstein, is expected to remain with the company.