Hot on the heels of its acquisition of 3Com, HP has paid $1.2bn or $5.70 per share for struggling smartphone vendor Palm.
Under the terms of the deal, which has already been approved by both boards of directors, HP will pick up Palm's assets and IP, including its webOS operating system, and takes a major step into the fast-growing smartphone market.
HP PSG executive vice president Todd Bradley said Palm's operating system provided HP with "an ideal platform to expand [its] mobility strategy."
"Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities and HP intends to be a leader in this space," he added.
HP has valued the connected devices market in the $100bn range and although it has had its own Windows based iPAQ products this deal hands it established hardware and an independent operating system.
In response, Jon Rubinstein, chairman and CEO of Palm, described the HP acquisition as a vote of confidence and added that it would give the vendor more robust offerings to both its partners and customers.
Several other vendors in the mobility market were understood to have been looking at Palm in recent weeks, including manufacturers Lenovo and HTC, which walked away from a potential deal.
The transaction is expected to close by 31 July.