Palm Acquires WeSync; Reports Financials
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Palm Inc. Wednesday reported it beat Wall Street's estimates for second quarter fiscal 2001 earnings by one cent per share and immediately followed the announcement by unveiling a definitive agreement to acquire WeSync, a provider of group and wireless synchronization technologies for Palm OS-based handhelds, for $40 to $45 million in cash or stock.
"The Internet is increasingly going mobile, and people are just discovering the value of up-to-the-minute, real-time information on the go," said Alan Kessler, chief operating officer of Palm's Platform and Products division. "Wireless synchronization of information such as calendars, contact lists and corporate information is a huge growth area, and the acquisition of WeSync will give Palm an arsenal of talent and resources to apply to its platform and speed great products and services to market."
Palm will determine whether to pay for the acquisition in cash or stock based on circumstances at the time of closing, which the company said it anticipates within its third fiscal quarter.
Palm said the acquisition has both short- and long-term upsides for Palm customers. In the immediate future, Palm has plans to incorporate WeSync Web properties and its capabilities with Palm's AnyDay Web calendaring service. The company also said WeSync technology will add functionality to its MyPalm mobile personal portal, set to debut on Christmas Day. Palm said WeSync will help MyPalm users share calendar, address, database and other information within personal or professional communities.
"Wireless refreshing of Web-based content such as work-related and group schedules, and WeSync's ability to wirelessly synch multiple users on multiple devices will yield important capabilities for Palm customers," said Jim Forbes, senior analyst and producer of DemoMobile, a new annual mobile-computing technology show that first identified and featured WeSync. "In the short term, this acquisition will supercharge the potential of the MyPalm portal, the industry's first Website portal specifically designed for handhelds. Over the longer term, WeSync's technology has the potential to drive a new usage model and deliver important new features and workgroup applications for Palm handheld owners."
WeSync's 27 employees will remain based in Portland, Ore.
Palm's financial report Wednesday marks its fourth straight quarter of triple digit sales growth. The company reported pro-forma net income of $27.5 million, about five cents per share, up from $15.5 million, about three cents per share, in the same period a year ago. Analysts were anticipating net income of four cents per share. Palm also reported revenue of $522.2 million, up 102 percent from $258.6 million for the same period last year.