Just announced, HP will buy PALM for $1.2billion or $5.70 per share in cash, a premium of 23% to today's close. That amounts to one thirteenth of HP's cash balance, which was previously earning nothing.
Good move, I don't care what Palm's near-term issues are. This works out to under 7x PALM's annual investment in R&D. The operating system is the valuable piece here, and with HP's heft they might have more of an ability to get the in-store training required to sell PALM's devices..
“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.”
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