Palm, Inc. today announced that it has entered into a 'strategic relationship' with the private-equity firm Elevation Partners as a part of a recapitalization plan that will help to strengthen Palm's position entering the next phase of the smartphone and mobile-computing markets. Under the planned recapitalization, Elevation will invest $325 million in Palm, and the company will utilize these proceeds along with existing cash and $400 million of new debt to finance the cash distribution.

If you think you've heard of Elevation Partners before, you're probably right. The investment group includes U2 frontman, Bono, as a member. Plus, gamers might remember Elevation for its investment into BioWare/Pandemic, an investment that was key to the merger of the two game development studios.

“As a result of this transaction, we will strengthen the Palm leadership team and create a more effective capital structure, which puts us in a great position to attract new talent, significantly strengthen our execution capabilities, and deliver long-term shareholder value,” said Ed Colligan, Palm president and chief executive officer.

“This is by far the largest investment that Elevation has ever made, which reflects our enthusiasm for Palm and its opportunity. This investment fits perfectly with Elevation’s investment strategy of partnering with great management teams to transform businesses in industries with dynamic technology change,” said Roger McNamee, managing director and co-founder of Elevation Partners. “We see Palm as uniquely positioned to deliver the integrated software and hardware solutions that will drive the next generation of mobile computing.”