Palm set to acquire Handspring

Personal digital assistant manufacturer Palm Inc., Santa Clara, Calif., will acquire smart phone maker Handspring Inc., Mountain View Calif., the companies announced Wednesday.

The deal is estimated at approximately $169 million, according to Hoover's Inc. The sale is expected to close in the fall and has been approved by boards of both companies.

Under the proposed terms of the acquisition, Handspring's shareholders will receive 0.09 Palm shares for each Handspring share. Palm will also spin off its operating system subsidiary, PalmSource Inc., as a separate company.

With approximately 1,200 employees, Palm generated $1.03 billion in 2002 revenue with a net loss of $82.2 million, according to Hoover's. For 2002, Handspring, employing 400, generated about $240.7 million in revenue with a net loss of $91.6 million, according to Hoover's.

The merged company will be led by Todd Bradley, Palm Solutions Group president and chief executive officer.

The company will be structured around two business units: handheld computing solutions, led by Ken Wirt, currently senior vice president, sales and marketing, for Palm Solutions; and smartphone solutions, to be led by Ed Colligan, current president and chief operating officer for Handspring.

Jeff Hawkins, Handspring chairman and chief product officer, will become chief technology officer for the merged company.