July 23, 2007

TomTom to Buy TeleAtlas; $2.8 Billion


WOW; in a pretty amazing move, TomTom has apparently made a bid for TeleAtlas, the big map data provider. The offer is for about $2.77 billion (USD), which is a 28% premium over the TeleAtlas stock price close on Friday.

What does this mean for the rest of the world's GPS makers who use TeleAtlas data? Well, you wouldn't pay all that money and then cut off a lot of your customers, one would think, right?

One thing that is starting to take shape is that the TeleAtlas van isn't needed for basic map making anymore. As we start to get programs like MapShare, and GPS units that can communicate back to servers, the GPS units do the mapmaking for the company.

When I was at TomTom last month I asked President Jocelyn Vigreux about MapShare and if the information learned about roads would be shared back with TeleAtlas. Now, that really doesn't matter anymore does it; they should be one company in the future.

My conclusion here is that with a tightening of the Map Data set to GPS Navigation system bond, we'll see better innovation coming out of the TomTom shop as this relationship matures.

Commenting on the proposed Offer, Harold Goddijn, Chief Executive Officer of TomTom said: “We think that the navigation industry is going to change dramatically in the next few years as end customers will give ever increasing importance to intelligent routing and continuously updated maps. By integrating customer feedback into the Tele Atlas map manufacturing process, we will be able to considerably enhance the user experience and further increase all Tele Atlas and all TomTom's customers' satisfaction. We will supply all companies wanting to rely on the improved maps for their PNDs, wireless handsets, in-car systems, internet services and in-house routing services.”

Update: There is a well written article over at Business Week that explores this deal, and discusses amoung other things: Mio/Mitac's reaction to the deal; they buy their maps from TeleAtlas, and are the #3 GPS manufacturer in the world, as well as Garmin's interest or ability to buy NAVTEQ. Check it out.

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Posted by Scott Martin at July 23, 2007 6:29 AM

Recent Comments

The financial metrics of the deal look bleak when considering Tele Atlas' current operating approach. But there are definitely operating efficiencies that can be realized when merged with TomTom's hardware. I did a brief post on the topic on my blog:

Posted by: Joe Mobile at July 24, 2007 6:50 PM
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