Palm, Inc., a leading provider of handheld computers, today executed on another leg of its mobile and wireless strategy with a definitive agreement to acquire Extended Systems Incorporated, a leading mobile solutions vendor in the enterprise space.

This strategy takes Palm beyond its traditional strength serving individual users, to encompass enterprise solutions. Extended Systems' product offerings represent the "glue" that binds the wealth of enterprise applications with easy-to-use handheld computers, which can now be managed by corporate information officers (CIOs).

Under the terms of the definitive agreement, Extended Systems' stockholders will receive shares of Palm valued at $22 per Extended Systems' share, subject to a collar described below. The transaction values Extended Systems at approximately $264 million on a fully diluted basis.

Importantly, this acquisition will make Palm a unique vendor that can provide both handheld computers and enterprise-class mobile infrastructure software and support for multiple operating systems, including Palm OS, Pocket PC, Windows CE, EPOC, and RIM. This comprehensive, behind-the-firewall solution supports groupware and business applications -- enhancing overall organizational productivity and controlling costs.

In a related move to sharpen customer focus, Palm created three strategic business groups -- the Enterprise Solutions Group, the Individual Solutions Group, and the Platform Solutions Group.