Nokia Buys Navigation Supplier, Navteq
Nokia has announced that it is paying US$8.1 billion to buy the navigation service provider, NAVTEQ. The navigation area is a fast growing business, and with location-based services expanding rapidly into mobile communications devices, the industry is poised for even further growth. Following the purchase, NAVTEQ will continue to provide map data platform to 3rd party navigation players.
NAVTEQ is a leading provider of comprehensive digital map information for automotive navigation systems, mobile navigation devices, Internet-based mapping applications, and government and business solutions. NAVTEQ also owns Traffic.com, a web and interactive service that provides traffic information and content to consumers. The Chicago-based company was founded in 1985, generated 2006 revenues of $582 million and has approximately 3,000 employees located in 168 offices in 30 countries.
"Location based services are one of the cornerstones of Nokia's Internet services strategy. The acquisition of NAVTEQ is another step toward Nokia becoming a leading player in this space," said Olli-Pekka Kallasvuo, President and CEO, Nokia. "By joining forces with NAVTEQ, we will be able to bring context and geographical information to a number of our Internet services with accelerated time to market. We also look forward to maintaining and enhancing the services and support provided to NAVTEQ's existing and future customers".
In commenting on the transaction, Christopher Galvin, Chairman of the Board of NAVTEQ, said "Nokia's offer of $78 per share reflects a very attractive valuation for NAVTEQ's stockholders, representing a 34% premium to our stock price of one month ago. In considering the offer, we approached other potential purchasers about their possible interest in NAVTEQ and our Board took those contacts and discussions into account in determining that Nokia's proposal was the best opportunity available to maximize value for our stockholders."
After completion of the transaction, NAVTEQ's current map data business will continue operationally independent, but organizationally a Nokia Group company. Judson Green will report directly to Olli-Pekka Kallasvuo.
The acquisition is expected to close in the first quarter of 2008. Nokia plans to finance the acquisition with a combination of cash and debt, and has secured a commitment on the debt.
Posted to the site on 1st October 2007