HP buys Palm for $1.2 billion
HP has announced it is to buy Palm for a total value of $1.2 billion (or $5.70 per share). Rumours that Palm was struggling financially have been flying for quite some time but no one had predicted that HP was in the frame to buy the tech company outright.
According to the press release, ‘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. ‘ Which kind of makes sense in a way – although with so many players out there I can’t help wondering whether they are just too late to compete. And $1.2 billion does sound like a surprisingly large amount of money to me.
Says Todd Bradley, executive vice president, Personal Systems Group, HP. “Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy ” He adds:”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.”
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.