Comments on: Filing Reveals Background on the Elevation Deal

In preparing for its recently announced recapitalization deal with Elevation Partners, Palm has filed a regulatory proxy statement with the SEC. The proxy statement reveals some interesting background information about how the deal came about. The filling also reveals that over the past year a number of different firms have explored purchasing Palm outright, including Elevation.

According to the statement, from January to April of this year Palm met with several potential strategic partners and private equity firms to discuss a potential 'business combination transactions'. Palm goes on to disclose that Elevation Partners initially made an offer to acquire 100% of Palm to take the company private. In the end Elevations unnamed equity partner backed out of the deal, and the current offer to acquire 25% of the company was put forward.

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What if Palm had a sale and nobody came...

LupinTheThird @ 7/5/2007 3:51:19 PM #

Note the important part: Elevation was going to buy 100%, then their private equity partner backed out at the last moment!

These private equity guys tend to be pretty smart. Apparently 75% of them were smart enough to realize they couldn't make any money with an investment in Palm, so they bailed....leaving Palm with a buyer willing to purchase just 25%, instead of 100% of the company like Palm wanted.

Silly Ed, tricked by Bono!

What if Palm had a sale and nobody came???

RE: What if Palm had a sale and nobody came...

mikecane @ 7/5/2007 5:10:24 PM #

>>>What if Palm had a sale and nobody came???

Aren't they going to be doing that with the Flopeo?

RE: What if Palm had a sale and nobody came...

freakout @ 7/5/2007 6:52:00 PM #

Note the important part: Elevation was going to buy 100%, then their private equity partner backed out at the last moment!

There's another explanation too: Elevation and this mystery partner were in cahoots. They string Palm along, letting think they're about to get snapped up in a tasty, profitable deal. Then the mystery partner (who never intended to buy in the first place) pulls out, leaving Palm desperate to salvage whatever they can and get a deal done. Hence the somewhat strange deal that made that gave them a new director, but burned through a lot of their cash and left them saddled with extra debt.

Or maybe not. I try to avoid commenting on Palm's corporate wheeling and dealing; it's really all so much gobbledygook to me.

RE: What if Palm had a sale and nobody came...

LiveFaith @ 7/6/2007 2:14:58 AM #

** it's really all so much gobbledygook to me.**

I was thinking more along the lines of B.O.S. Bowl of Spaghetti. That's what their corporate history looks like. Imagine where the "Pilot Vision" would be today if Palm had began with solid hard nosed business leaders with a heart for Palm? Maybe people would be camping out for their new releases?

Pat Horne

Innovate in products, not corporate hocus pocus.

DrewT3 @ 7/6/2007 4:34:23 AM #

Palm sure has come up with a lot of corporate shell games in the last few years. Palm. PalmOne. PalmSource. Palm again. Now the Elevation deal.
And in all that time the only "new" product they've come up with is a color Alphasmart Dana with no software. Wow.

RE: What if Palm had a sale and nobody came...

LiveFaith @ 7/6/2007 9:28:59 AM #

Yeah, but that color is pretty impressive. Give credit where credit is due ...

Pat Horne

Still a bad deal for Palm

TreoAnon @ 7/5/2007 5:08:30 PM #

This de-capitalization deal needs to be killed and Palm needs to continue as a well funded independent corporation until either they can make another must-have product or someone buys them.

Evelation Partners should buy shares of Palm from the open market instead of this complex and risky backroom arrangement to obtain effective control at a discounted price.

It's like transfusing a corpse

mikecane @ 7/5/2007 5:09:31 PM #

What a waste of blood it is.

In this case, a waste of money.

Very interesting

Tuckermaclain @ 7/6/2007 9:52:15 AM #

Private investors aren't always right. It is interesting though. I'm waiting for the definative analysis of PIC's own "Odd Couple" of TVoR and Beers. Surprised I haven't seen them yet.