GDT will be merged with Tele Atlas’s Tana operation in the US, and the company said its position will be strengthened by the combination of Tana’s turn-by-turn map for navigation and GDT’s expertize in the geographic information services, routing, logistics and internet sectors.
However, the acquisition comes at a price and ‘s-Hertogenbosch, Belgium-based Tele Atlas is considering a $210m funding proposal from an investment group headed by Oak Investment Partners and New Enterprise Associates, which will not only fund the GDT acquisition, but will also provide funds for cost-cutting, refinancing existing loans, and providing future working capital. However, existing shareholders will see a considerable dilution of their holdings.
At a time when the market for car navigation systems is taking off, Tele Atlas has a poor financial record. In the year to December 31, it recorded a net loss of 87.3m euros ($104.1m), up from a loss of 18.6m euros ($22.2m) on revenue 10.4% higher at 86.5m euros ($103.2m).
By contrast, Navteq Corp which claims to be market leader in digital mapping systems, reported last week in its IPO filing that revenue in 2003 increased 64.4% to $272.6m.
The GDT acquisition will boost Tele Atlas’s figures. In the year to March 31, 2004 the company reported revenue of $43.5m and earnings before interest, taxes, depreciation, amortization and capitalization of software and database development costs of $6.5m.
Tele Atlas said it expects to realize cost savings of about 20m euros ($24m) by combining its North American operations with GDT.
This article is based on material originally published by ComputerWire
