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VIRTUALISATION iPod guru & private equity to revitalise Palm
VIRTUALISATION iPod guru & private equity to revitalise Palm | iPod guru & private equity to revitalise Palm |
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| by Stuart Corner | |
| Tuesday, 05 June 2007 | |
  
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Elevation will invest $US325 million in Palm taking a 25 percent stake, and the company will use these funds along with existing cash and $US400 million of new debt to finance a cash distribution of $US9 per share to shareholders. Fred Anderson and Roger McNamee, managing directors and co-founders of Elevation, will become directors of Palm and Eric Benhamou and D Scott Mercer will resign. Palm president and CEO, Ed Colligan, said: "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. Rubinstein is one of the top engineering executives in Silicon Valley, and he will lead our product-development efforts." At Palm Rubinstein will join Paul Mercer, the man who helped Apple to develop the interface for the original iPod. He was hired in March 2007, in an unspecified role. According to McNamee, "this is by far the largest investment that Elevation has ever made, which reflects our enthusiasm for Palm and its opportunity...We see Palm as uniquely positioned to deliver the integrated software and hardware solutions that will drive the next generation of mobile computing." Elevation will purchase $US325 million of a new series of convertible preferred stock and $US8.50 per share, a premium of approximately 16 percent to the implied post-distribution price over the 10 trading days ended June 1, 2007, excluding the $US9 per share cash distribution. The cash distribution to shareholders will total about $US840 million and represent more than half of Palm's current market capitalisation.{moscomment} |
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