April 28, 2010 5:35 PM
Gibson Dunn, Davis Polk lead as HP Snags Palm
Posted by Zach Lowe
Hewlett-Packard has swooped in and acquired Palm Inc. for $1.2 billion amid rampant speculation that Asian companies were the leading contenders to acquire the handheld device maker, according to Bloomberg.
And for its final major deal, Palm turned to Davis Polk & Wardwell instead of its traditional deal counsel at Wilson Sonsini Goodrich & Rosati, a move our colleagues at The Recorder first reported on two weeks ago.
The switch isn't that sudden, though, according to William Kelly, who led the Davis Polk team on the deal. The firm began doing work for Palm several years ago, at about the time that a management shake-up at the company saw Eric Benhamou leave his position as chair of the Palm board; Benhamou is close with Wilson chair Larry Sonsini, according to The Recorder, which helps explain why the company had turned to Wilson Sonsini for several of its prior landmark deals.
Not this time, says Kelly, whose relationship with Palm started when he answered an unexpected call from company executives. "I just answered my phone," he says. "That's always good business." Davis Polk subsequently advised Palm on a December 2008 agreement with private equity firm Elevation Partners, which pumped $100 million into Palm and became the company's lead investor, Kelly says.
Hewlett-Packard, represented in the Palm deal by Gibson, Dunn & Crutcher, has already secured Elevation Partners' support for the acquisition, according to a source familiar with the matter. A team from Simpson, Thacher & Bartlett advised Elevation in those talks, the sources say. (For you U2 fans out there, Bono serves as a managing director for Elevation, and we can't help but note that he's wearing his trademark sunglasses even in the photograph used on his Elevation Web bio.)
Russell Hansen led the Gibson Dunn team on the deal. Hansen declined to comment on the specifics of the agreement. Gibson Dunn has previously represented HP in both acquisitions and litigation matters.
Other partners on the Davis Polk team included corporate partner Mischa Travers, tax partner Rachel Kleinberg, IP partner Steven Weiner, and antitrust partner Arthur Burke.
Under the terms of the deal, HP will pay $5.70 for each Palm share, a 23 percent premium on today's Palm closing price, Bloomberg reports. The deal gives HP a major foothold in the smartphone market, though Palm's phones, the Pre and Pixi, have so far fallen short of sales expectations, Bloomberg reports.Make a comment