TeleCommunication Systems To Acquire Navigation Firm - InformationWeek

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12/3/2009
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TeleCommunication Systems To Acquire Navigation Firm

The $170 million purchase of Networks In Motion will enable TeleCommunication Systems to capitalize on the fast-growing location-based services market.

In a bid to boost its location-based services, TeleCommunication Systems said Thursday it is acquiring Networks In Motion for about $170 million.

Networks in Motion specializes in enabling mobile operators to enhance or offer navigation services for cell phones and smartphones with GPS chips. The privately held company developed a navigation platform that is used in by Verizon Wireless, MetroPCS, Telus, and Virgin Mobile. The deal is a combination of cash and stock, is subject to shareholder approval, and is expected to close by the end of the month.

"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 Tose, CEO of TCS, in a statement. "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."

The acquisition will help TCS capitalize on the surge in the LBS market; a report from ABI Research expects the market to hit $13.3 billion in the next four years. Enterprise services like fleet management and workforce tracking will account for the bulk of this growth, but personal navigation services like Verizon's VZ Navigator are also expected to see an uptick in use and revenue.

Networks in Motion is facing some potentially stiff competition in the mobile navigation market because companies like TomTom and Garmin are jumping into the smartphone space as consumers inch away from standalone navigation devices. Google also recently introduced a free navigation service that comes with Android 2.0 devices like the Motorola Droid.

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