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Palm receives $325 million investment from Elevation Partners
By Lisa Kerner
Charlotte, N.C., Oct. 24 - Palm, Inc. closed its $325 million recapitalization with Elevation Partners, LP, according to a company news release.
Palm said it will use the proceeds along with existing cash and $400 million of new debt to finance a $9.00-per-share cash distribution. The record date for the distribution is Oct. 24.
Under the terms of the recapitalization plan, Elevation has purchased $325 million of a new series of convertible preferred stock with a conversion price of $8.50 per share. Elevation will own about 27% of Palm's outstanding common stock on an as-converted basis.
Apple's former senior vice president of hardware engineering and head of its iPod division Jon Rubinstein joined Palm as executive chairman of the board. 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. Palm's board increased to nine directors from eight in connection with the transaction.
"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," Palm president and chief executive officer Ed Colligan said in a company news release.
"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."
Palm is a Sunnyvale, Calif., mobile computing devices company.
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