Mobile smartphone maker
Palm, Inc. (well known for its
Palm Treo Smartphones)
announced yesterday that Elevation Partners has agreed to make an additional US$
100 million equity investment in Palm. Under a definitive agreement reached
yesterday, Elevation will increase its investment in Palm by acquiring newly
issued Series C preferred stock that is convertible into Palm common stock at a
price of US$ 3.25 per share, a 31 percent premium to the closing price of Palm
common stock on Dec. 19, 2008. The Series C preferred stock carries a 0 %
dividend rate. Elevation will also receive warrants to acquire 7 million shares
of Palm common stock at the same price.
Prior to March 31, 2009, Palm may elect to cause Elevation to sell up to US$
49 million of this new investment to other investors on the same or better terms
than on which Elevation invested.
"The additional capital from Elevation Partners will enable us to put
added momentum behind the new product introductions scheduled for 2009 and
will provide us with enhanced stability in unsettled economic times," said
Ed Colligan, president and chief executive officer of Palm, Inc. "Elevation
has been a great partner to Palm, and we appreciate their continued
confidence and support."
"We believe that Palm is in a position to transform the cell phone
industry, and we are pleased to have the opportunity to make this additional
investment in the company. Palm has an industry-leading team and an
exciting, differentiated product roadmap. We are proud to be associated with
the company and look forward to great things from Palm in 2009 and beyond,"
stated Roger McNamee, co-founder of Elevation Partners.
The transaction is expected to close by Jan. 31, 2009, subject to customary
Cheers ~ Arne