Navigation systems attract big money
October 2, 2007 - 12:01 am ET
Cellular phone giant Nokia said on Monday it will offer $8.1 billion for U.S.-based digital map supplier Navteq in its largest takeover ever, underscoring the growing value of navigation systems.
Navteq has a commanding lead in installed map data systems in North American vehicles, and may also be the leader in turn-by-turn navigation data offered by services such as OnStar in North America, said analyst Phil Magney, of Telematics Research Group in Minnetonka, Minn.
Portable navigation devices such as those from Garmin Ltd., and Magellan Navigation Inc. also use Navteq digital maps.
Competitor TomTom NV, a big European portable navigation device maker, is in the process of purchasing Navteq rival Tele Atlas and has said it will make a formal acquisition offer on Tuesday.
The Nokia-Navteq deal would give the world’s top cellphone maker, which is looking for new revenue sources as the cellphone industry matures, a stronghold in the navigation business, one of the fastest growing segments in the technology industry.
Nokia’s offer values Navteq at 8.6 times 2008 sales and 24.5 times 2008 earnings before interest, tax, depreciation and amortization (EBITDA), according to Reuters Estimates.
TomTom offered 5.2 times 2008 sales and 20.9 times EBITDA in July for Tele Atlas.
Reuters contributed to this report
Source:
Tim Moran and Philip Nussel
Automotive News
