Hewlett-Packard has just announced that it would buy Palm for a staggering price of $1.2 billion dollars, roughly about $5.70 per share of common stock. The merge and acquisition, which are planned to close by July 31, can give the Palo Alto computer giant a great opportunity to get a bigger slice from the hot and trendy smartphones market, valued at $100bn alone and with annual rapid growth of 20% . HP executive vice president Todd Bradley said that “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” and also added that “Between smartphones, slates, and potentially netbooks, there are a lot of opportunities here.” And he’s right, just think about the endless potential possibilities of having Palm’s stunning WebOS integrated in HP’s future multi-touch devices, whether these are mobile phones, tablets or other portable machines – it’s HUGE and HP, in our opinion, has clearly taken a few significant steps in the right direction, especially now when strident voices, complaining about a sluggish HP Slate performance, start floating around – WebOS can definitely improve speed reaction dramatically – and someone at the HP headquarters has probably figured this one pretty well. Brian Humphries, HP’s Senior Vice President of Strategy and Corporate Development quoted saying “our intent is to double down on WebOS”. That’s very important, considering the months of speculations where Palm was desperately looking for a buyer. And given the fact that HP is getting over 1500 patents that Palm currently owns (that probably has considerable value as well, isn’t it?), along with a very good team of young talented engineers and one relentless chairman and CEO, Jon Rubinstein, who is expected to remain with the company another few years long, this very complex deal that few months back, could easily have seemed impossible, can all of a sudden turn into a nice and promising bargain. PR announcement after the break.
Update: Digitimes says that HP Taiwan VP, Monty Wong has officially confirmed a webOS tablet to go live somewhere around October of this year. Stay tuned for more to come.
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.