An LBS giant is formed and TeleCommunication Systems pays US$ 170 for Networks In Motion.
TCS today announced that it has entered into a definitive merger agreement to acquire Networks In Motion for an aggregate of US$ 170 million. The merger consideration will be paid in a combination of cash, TCS common stock and promissory notes. Networks In Motion's Board of Directors has unanimously adopted the merger agreement and recommended its approval by Networks In Motion's stockholders. The acquisition accelerates TCS' position in enabling mobile operators to offer enhanced location-based data services. "Location-based services are experiencing substantial growth and we believe that this is the right time to invest to strengthen our participation in this space," said Maurice B. Tose, chief executive officer of TCS. "We believe the combination of Networks In Motion applications with our current offerings of carrier infrastructure and applications for location-based services will enhance our value proposition for this exciting market."
"TCS provides an ideal opportunity for us to achieve our goals of leadership in location-based services on a faster and much larger scale," said Doug Antone, chief executive officer of Networks in Motion. "We look forward to becoming an integral part of the TCS family."
The acquisition also further shifts the company's revenue mix from an historical 50% services/50% systems to an expected 2010 revenue that is 65% services/35% systems. Substantially all of Networks In Motion's revenue is recurring services revenue derived from subscriptions to its full-featured navigation applications, providing high visibility of future revenues. Based on contracts in place at the time of acquisition, TCS expects the NIM business to add $65 to $75 million to TCS's 2010 commercial services revenue and $21 to $24 million to EBITDA. Networks In Motion has about 3.5 million subscribers to its applications, and about 200 employees.
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