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Todd Bradley is the man behind HP's decision to acquire Palm. Bradley heads HP PC's consumer division and is the former Palm CEO

What a deal!

H-P said it will pay $5.70 in cash per share for Palm, when only 2-weeks ago, on April 12, the same shares were worth over $6!

And despite the headlines, H-P is really forking less than $1 billion for Palm, as the smartphone maker has roughly $600 million in cash and short term investments, but $387 million in long term debt.

This really shows just how Palm executives felt confident in the viability of their company!

So why would H-P buy Palm, beyond just being a fire-sale? Here’s analyst Jack Gold top 5 reasons:

1. The key management of HP’s Personal Systems Group is composed of nearly all the execs previously running Palm, including HP’s Todd Bradley. So the business and operations of Palm is well understood.
2. HPs Windows Mobile phone business is dying a rapid death and HP would have had to totally revamp its product line in order to stay in the smartphone business. It could have designed new devices with Android or Windows Phone 7, either of which would have taken time and would be expensive. Palm brings HP a modern and competitive platform that is already designed, implemented, and in production. This saves HP many R&D dollars as well as dramatically accelerates time to market.
3. HP can leverage its production capabilities to get large volumes of product into the market at low cost. Palm was not able to quickly reduce its costs and profitably compete in all areas of the market.
4. HP gets a substantial IP and patent base it can use as a defensive threat against the competition (especially Apple, but potentially HTC and Google as well). This is not a trivial issue as many legal battles lie ahead in the smartphone and mobile/portable device marketplace. A strong IP portfolio that is defensible is important. Indeed, the IP may even eventually result in license revenues to HP form some of its competitors.
5. WebOS could easily be re-positioned for tablets and other consumer devices to compete with Android, iPad, etc. This is a key growth area for HP. It has already shown a Windows based tablet. And since tablets are primarily front ends to the Internet, it allows HP to deploy many cloud-based services from which it can generate revenues, including those in an app store, streamed services, etc.

However, HP has made acquisitions in the past that did not really work out, and HP has not always been good at integrating acquired technologies in their business.

While the potential for success is there, we will have to wait and see how well HP does at integrating Palm into their mainstream operations before calling this a win for HP.