PalmSource acquires CMS - ready for Linux!

Colin Dunstan · 02-03-2005, 10:14 AM

Today PalmSource announced the completion of its China MobileSoft (CMS) acquisition. Bits and parts from the press release:

Few management changes
Jiping Wang will continue as CEO of the acquired company and will report to David Nagel, PalmSource president and CEO. In addition, Madeline Duva, CEO of China MobileSoft, joins PalmSource as vice president, silicon and ODM partners, and John Ostrem, founder, chairman and CTO of China MobileSoft, joins PalmSource as lead scientist.

The strategy
PalmSource acquired CMS as part of its strategy to further extend the Company's leadership as a software provider for phones and mobile devices worldwide. [...] Over time, PalmSource expects to leverage the work CMS has done with Linux to provide a new version of Palm OS based on Linux. The Company will continue to support the Palm OS® Garnet and Palm OS® Cobalt operating system software lines.

Everything is about money
PalmSource issued approximately 1,570,000 shares of PalmSource common stock in exchange for the outstanding equity and rights to acquire equity in CMS for a total purchase price of approximately $16 million. In connection with the acquisition, PalmSource's compensation committee approved the issuance of restricted stock, with a two year vesting schedule, and stock options, with a four year vesting schedule and exercisable at fair market value, totaling 219,966 shares to a total of 141 employees and consultants as part of the incentive plan to retain their services following the acquisition.

gadgetguru · 02-03-2005, 06:13 PM

While the news tried to show what looks like malicious intent (Everything is in the money) on the part of Palmsource, it should be pointed out that no money were paid for the acquisition. It's true that's shares were issued and that would dilute current stockholders holding, but it also add value to the company without any cashout.

Stock options issued to retain key execs are I believe industry-wide practice. if these key developers/execs were to resign immediately after merger, then the merger will be more complicated and some key company advantages (Secrets, codes, etc) might be lost.

Still, Palmsource still has to prove that creating a Palm OS layer on top of Linux will be viable. For some, this will split the company's already divided vision (Cobalt and Garnet) and complicate, if not muddy up the operating system. Only in time will this move be known whether it is a step forward or backward for the company and OS.

Alexander Turcic · 02-04-2005, 07:52 AM

Link to the relevant Form 8K.

02-03-2005, 10:14 AM	#1
Colin Dunstan Is papyrophobic! Posts: 1,926 Karma: 1009999 Join Date: Aug 2003 Location: USA Device: Dell Axim	PalmSource acquires CMS - ready for Linux! Today PalmSource announced the completion of its China MobileSoft (CMS) acquisition. Bits and parts from the press release: Few management changes Jiping Wang will continue as CEO of the acquired company and will report to David Nagel, PalmSource president and CEO. In addition, Madeline Duva, CEO of China MobileSoft, joins PalmSource as vice president, silicon and ODM partners, and John Ostrem, founder, chairman and CTO of China MobileSoft, joins PalmSource as lead scientist. The strategy PalmSource acquired CMS as part of its strategy to further extend the Company's leadership as a software provider for phones and mobile devices worldwide. [...] Over time, PalmSource expects to leverage the work CMS has done with Linux to provide a new version of Palm OS based on Linux. The Company will continue to support the Palm OS® Garnet and Palm OS® Cobalt operating system software lines. Everything is about money PalmSource issued approximately 1,570,000 shares of PalmSource common stock in exchange for the outstanding equity and rights to acquire equity in CMS for a total purchase price of approximately $16 million. In connection with the acquisition, PalmSource's compensation committee approved the issuance of restricted stock, with a two year vesting schedule, and stock options, with a four year vesting schedule and exercisable at fair market value, totaling 219,966 shares to a total of 141 employees and consultants as part of the incentive plan to retain their services following the acquisition.

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02-03-2005, 06:13 PM	#2
gadgetguru Addict Posts: 214 Karma: 6370 Join Date: May 2003 Location: Asia Device: Tungsten T5	While the news tried to show what looks like malicious intent (Everything is in the money) on the part of Palmsource, it should be pointed out that no money were paid for the acquisition. It's true that's shares were issued and that would dilute current stockholders holding, but it also add value to the company without any cashout. Stock options issued to retain key execs are I believe industry-wide practice. if these key developers/execs were to resign immediately after merger, then the merger will be more complicated and some key company advantages (Secrets, codes, etc) might be lost. Still, Palmsource still has to prove that creating a Palm OS layer on top of Linux will be viable. For some, this will split the company's already divided vision (Cobalt and Garnet) and complicate, if not muddy up the operating system. Only in time will this move be known whether it is a step forward or backward for the company and OS.

02-04-2005, 07:52 AM	#3
Alexander Turcic Fully Converged Posts: 18,163 Karma: 14021202 Join Date: Oct 2002 Location: Switzerland Device: Too many to count here.	Link to the relevant Form 8K.

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