Long-running speculation that Palm Inc. has been a takeover target may abate now that the company has received a $325 million infusion of private capital from Elevation Partners-a 25% stake-in a recapitalization effort to move the company ahead in smartphone and mobile computing markets.
The Sunnyvale, Calif., company said it will pay shareholders $9 per share as a result of the Elevation deal, which includes $400 million in new debt and existing cash. Palm estimated the payout would amount to about $940 million, leaving the company with about $300 million in cash.
Palm also announced that Jon Rubinstein, formerly head of the iPod division at Apple Inc. and an executive of hardware engineering, will become executive chairman of Palm’s board. Two co-founders and managing directors of Elevation, Fred Anderson and Roger McNamee, also will join Palm’s board.
Palm’s President and CEO Ed Colligan said Rubinstein will lead the company’s product development efforts.
Elevation is a $1.9 billion private equity firm that counts among its partners former executives from Apple, The Blackstone Group, Silver Lake Partners and Bono of the rock band U2.
Palm secures $325M injection from private equity
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