Palm, Inc. and HP have just announced a definitive agreement in which HP will purchase Palm at a price of $5.70 per share of Palm common stock in cash, or an enterprise value of approximately $1.2 billion.
“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, EVP, 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.”
The buyout puts an end to speculation that the beleaguered handset maker would fall to HTC or, subsequent to the public rejection of that arrangement, Lenovo.
The acquisition is also particularly poignant for HP, which helped to institutionalize mobile computing with the iPAQ line at the turn of the millennium. As chief rival Dell plans to launch a wide range of sleek smartphones over the next 18 months, the buyout is equal parts shrewd as well.
While the $1.2 billion injection will undoubtedly put the fanatical Palm faithful at ease, the company’s 6% market share still makes for a long road ahead.
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