Today HP and Palm announced that HP will be acquiring the company for 1.2 billion dollars. This is certainly good for one of the leading PC manufacturers, and now they can push into the consumer and enterprise markets all at once with their IPAQ devices.
Initially, Palm and HP were competing with each other with the IPAQ, and Palm Pilot devices, and now they are about to make sweet, sweet love. This certainly helps Palm out, as it gives them the scale it needs to continue their WebOS lineup, and HP now has an IP portfolio that is almost as great as Apple’s. “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.”
With Palm in their pocket, HP now is positioned to really take on the smartphone market. The IPAQ devices that HP has been making with Windows Mobile have been met with very mixed reception, as they have been stuck in a PDA sort of realm with little chance of getting out of it. With WebOS in tow, HP will most certainly go into the consumer market, give a much-needed hardware improvement, and push WebOS like there’s no tomorrow.With HP’s marketing might, no longer will WebOS be met with cringes.
With other computer manufacturers, like Dell, taking market share away from HP, the acquisition of Palm looks like a very smart investment for the company. With some knowledge of the mobile industry, HP could turn WebOS into a very powerful player in the market.
While this is good for both companies, what’s a company it may hurt? Google. It was rumored that HP and Google would team up, and HP had shown off it’s Airlife Android netbook a couple of months ago. Does this mean that there will no longer be an Android tablet that’s been rumored ever since we’d heard of the Windows 7 HP tablet? It shouldn’t hurt the big G too hard, as there will soon be a flood of Android tablets. Palm on the other hand needs any help in can get, and HP sure came to the rescue.
Expect good things to come from this new marriage, hopefully we won’t have to wait too long to see what HP’s plans are for WebOS. Hopefully, and this is just me wishing, we may see an HP WebOS Slate in the future.
Palm is now up $1.23 (26.57%) after hours.
HP to Acquire Palm for $1.2 Billion
Combination will accelerate HP’s growth within the more than $100 billion connected mobile device market
PALO ALTO and SUNNYVALE, Calif., April 28, 2010
HP and Palm, Inc. (NASDAQ: PALM) 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.
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