Feeds

Private investment firm greases Palm

Elevated by cash, iPod guru and former Apple CFO

Designing a Defense for Mobile Applications

Struggling to regain its edge in the smartphone market, Palm has reached an agreement to sell a quarter of the company to a private equity firm and to place a former iPod guru in an executive seat.

Elevation Partners will pay a special distribution of $8.50 per share, or about $940m of convertible preferred Palm stock, to take its stake. The company also agreed to invest $325m into the company.

As a part of the deal, Jon Rubinstein, the former Apple executive behind its iPod division, will join Palm as its executive chairman of the board. Managing directors at Elevation Fred Anderson and Roger McNamee will also take board seats.

Anderson, the former CFO at Apple, recently settled with the Securities and Exchange Commission on charges related to stock option backdating. He agreed to pay back approximately $3.5m without admitting guilt to make up for personal gains in the scandal.

"As a result of this transaction, we will strengthen the Palm leadership team and create a more effective capital structure, which puts us in a great position to attract new talent, significantly strengthen our execution capabilities and deliver long-term shareholder value," Palm CEO Ed Colligan said.

Palm is best known for its Treo line of smartphones. The company began its latest revitalization attempt last week with the announcement of a "smartphone companion product," the Foleo.

Elevation's investment — the $1.9bn private equity firm's largest to date — will help Palm fight against competitors in the smartphone game with deeper pockets. Mobile phone makers are currently bracing themselves for the potential impact of Apple's iPhone due out on June 29. ®

Bootnote

Notably among Elevation's five partners is Bono, lead singer of U2. The Register ventures to guess he doesn't sit in on too many board meetings.

The smart choice: opportunity from uncertainty

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
Want to beat Verizon's slow Netflix? Get a VPN
Exec finds stream speed climbs when smuggled out
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.