Friday, 8 June 2007

Elevation Partners LP Infuses Fund Into Palm

Private Equity firm Elevation Partners LP has pumped in USD 325 million into ailing smartphone manufacturer Palm Inc.

Private Equity firm Elevation Partners LP has pumped in USD 325 million into ailing smartphone manufacturer Palm Inc.

This news comes as a surprise to people who believed that either world’s no. 2 mobile phone company Motorola Inc. or Finland based world’s largest maker of mobile phones Nokia Corp. would acquire the pioneer of smart handheld devices as the company faces increasingly aggressive competition in the smart phone market.

Elevation is a USD1.9 billion private equity firm, and one of its five partners is Bono, the singer of Irish rock band U2. The investment in Palm is by far the largest the firm has made.

The device maker has also secured USD 400 million and a USD40 million revolving credit facility. Once the deal closes, there will also be changes in Palm's board of directors.

Along with the funding, a new person will join Palm’s board. Apple Inc.’s former VP of hardware engineering and head of its iPod division Jon Rubinstein, will become executive chairman of Palm's board. He will also head up Palm's product development efforts.

Current Chairman Eric Benhamou and board member D. Scott Mercer will resign from Palm's board and will be replaced by Rubinstein along with Fred Anderson and Roger McNamee, managing directors and co-founders of Elevation.