Sunnyvale, Calif. — Palm announced new funding to help position the company to compete in the increasingly competitive smartphone market.
Palm announced today a strategic relationship with the private-equity firm Elevation Partners which will invest $325 million in Palm, giving it about 25 percent of Palm's outstanding common stock.
Palm also announced a recapitalization plan and said Jon Rubinstein, former Apple hardware engineering senior VP and head of the iPod division at Apple, will join Palm as executive chairman of the board.
Palm president/CEO Ed Colligan stated, “Jon Rubinstein is one of the top engineering executives in Silicon Valley, and he will lead our product-development efforts. As a significant new investor, Elevation brings onboard unique partners and relationships, plus a long investment horizon.”
Under the planned recapitalization, Palm secured commitments for $400 million of new debt and a $40 million revolving credit facility.
In other shifts in Palm’s board of directors, Eric Benhamou and D. Scott Mercer, who will resign from the board, and two executives at Elevation Partners, Fred Anderson and Roger McNamee, will join the board.
The recapitalization is expected to close in the third quarter of the calendar year and is subject to shareholder approval.