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HP Acquisition of Palm
- 1. HP’s Acquisition of Palm Prepared By: Ajay Singh Quynh Nguyen Yu Liu Vikram Mankar Sara Arya Rishi Khaitan
- 2. HP & Palm – An opportunity Compelling Combination Compelling Combination
- 3. Valuation Our final valuation: $1,100 - $1,350 Total Enterprise Value (US$ millions) 0 $1,000 $2,000 $3,000 $4,000 $5,000 $1,107 $1,620 $1,384 $2,025 $3,156 $4,266 $708 $1,928 ComparableComparable Comparable + Premium Comparable + Premium PrecedentsPrecedents DCFDCF
- 4. Negotiation Strategy • Negotiation committee for price & terms of acquisition – Value to shareholders – Objectives & Goals of the transaction – Identification of key issues related to price, integration, future investments, governance
- 5. Post Merger Integration Palm WebOS developers – Message of commitment Relationship with the carriers – Share goals and commitment Talent Retention Integration Change Management SMEs to execute critical integration activities with clear lines of accountability by function Focus on realizing the synergies • Culture Integration • Communication • Support for overall integration
- 6. Conclusion
- 7. Thanks !!
Notas del editor
- HP Board – setup a negotiation committee for price & terms of acquisition Value to shareholders Objectives & Goals of the transaction Identification of key issues related to price, integration, future investments, governance Establishment of Bid Offer ( Opening Price ) $1.1B EV (based on comparable companies) which is a <x>% premium Added Value/Leverage to use ( Sweeteners ) Continued investment in WebOS and leverage to other platforms/form factors WebOS platform team to be led by Jon Rubenstien (CEO Palm) Job Retentions... 100% for the WebOS team in Palm and potentially large numbers/negotiated for their hardware team (dont think HP would want many h/w guys from Palm). Establishment of Walk-Away price $1.6B EV (based on DCF sensitivity analysis, premium value to shareholders and optimistic growth of mobility business) which is a <y>% premium
- HP ’ s acquisition of Palm will help it to offer WebOS based tablets Hedging strategy against headwinds to notebook growth HP can significantly increase PALM R&D and SG&A ahead of the WebOS tablet launch Back-door entry into ultra-competitive $100B plus smartphone market Palm has only 2000 apps in its ecosystem Lacks security and email capabilities required for enterprise market