Tokyo-based software firm ACCESS today completed its acquisition of Palm platform developer PalmSource. Consequently, PalmSource is now a wholly owned subsidiary of the Japanese vendor and will no longer be a separate publicly traded company.

The total transaction cost is $324.3 million. As a result of the acquisition, each outstanding share of PalmSource common stock has been converted automatically into the right to receive $18.50 in cash.

More than 39 million mobile phones, handhelds, and other mobile devices run PalmSource software. ACCESS's NetFront browser technology delivers full Internet browsing and related services to mobile devices and consumer electronics ranging from digital televisions to automobile telematics to smartphones and PDAs.

PalmSource split with parent company Palm, Inc. (which then changed its name to palmOne) back in October 2003. Earlier this year, PalmOne changed its name back to Palm after buying full rights to it from PalmSource for $30 million.

PalmSource's CEO, David Nagel, stepped down in May. ACCESS announced its accepted proposal in September, but not without controversy.

A month later, reports surfaced that Motorola had its eye on PalmSource as well (Palm did too, even). In fact, the electronics giant asserted it had closed the deal on September 7th for $17.25 per share, a couple of days before ACCESS announced its $18.50 per share buyout.

According to the Chicago Sun-Times, Motorola is suing PalmSource for $8.7 million in damages. An amount, it told a judge at Delaware Chancery Court, previously agreed upon as compensation or a breakup fee should its deal with the Palm platform vendor fall through.

Court papers stated "PalmSource was obligated to pay Motorola the termination fee of $8,697,595 on or before Sept. 16, 2005.'' It didn't, hence Motorola's lawsuit.

ACCESS Likes Linux
PalmSource's new parent company says it is committed to its subsidiary's plans to release a Linux version of the Palm OS next year. That commitment was highlighted yesterday when PalmSource announced its founding membership in the new Linux Phone Standards (LiPS) Forum.

LiPS is an a consortium companies who's goal is to accelerate the adoption of Linux in fixed, mobile and converged devices by standardizing Linux-based services and APIs that most directly influence the development, deployment and interoperability of applications and user-level services. It wants to compete with the likes of Microsoft and Symbian.

For more on PalmSource's relationship to Linux and LiPS, see 'Lips' Forum For Linux Lovers & PalmSource's Linux Year.