Palm announced yesterday that it has closed the recapitalization plan with Elevation Partners, positioning Palm to lead the next phase of the smartphone and mobile-computing markets. Elevation has invested $325 million in Palm, and the company will utilize these proceeds along with existing cash and $400 million of new debt to finance a $9 per share cash distribution. Palm shareholders of record as of Oct. 24, 4 p.m. EDT, should receive the cash distribution within approximately 10 business days.
Jon Rubinstein, former senior vice president of hardware engineering and head of the iPod division at Apple, has joined Palm as executive chairman of the board, and Fred Anderson and Roger McNamee, managing directors and co-founders of Elevation, have joined Palm's board of directors. Rubinstein, Anderson, and McNamee replace Eric Benhamou and Bruce Dunlevie, who resigned from Palm's board of directors. The total number of directors on the board has been increased from eight to nine in connection with the transaction.
"This transaction lays the groundwork for Palm to recapture our position as the leading innovator and brand of the mobile-computing revolution. We will build on our history of innovation to create next-generation, software-rich mobile solutions that enable people to more effectively manage their lives and communicate with family, friends and colleagues wherever they are," said Ed Colligan, Palm president and chief executive officer. "We are also pleased that we can reward our shareholders with this $9 cash distribution, and provide them with the opportunity to be rewarded further through their continued long-term investment in Palm."
Looks like Palm is set up now to start cranking out some new and exciting products. They've got the cash, the know how, and some new faces in the mix. I'd love to see Palm recapture their position as Colligan mentioned above.
Jon Rubinstein said:
"I am focused on working with Ed and the team to build on the legacy of Palm and drive innovation in the mobile-computing market. Over the last few months, I've seen the huge potential that lies in Palm's brand, distribution and loyal customer base. Palm's future roadmap in terms of both the software and products is impressive and complements the new products that Palm has recently introduced. While there is much work to be done, there are exciting days ahead for all of us."
A kind TreoCentral reader sent in a link to a TD Ameritrade Streamer article by Roger Cheng of Dow Jones Newswire. In the article, Jon Rubinstein says:
A new operating system is among the chief priorities for Palm, Rubenstein said. He added it will take 18 months before new products come out.
"It's a probably good target," Rubenstein said. "These things take time."
That's the same time plan we recently heard from Ed Colligan too. I'm looking forward to seeing those new products.
You can read the full TD Ameritrade Streamer article here.
You can read the full Palm press release here.