RE: Telmap very close to Poyntransaction Parameters
Intel purchase of Telmap
Transaction value was not officially disclosed but Israeli media place it somewhere in the range of $300mm to $350mm. PaidContent reports that Telmap has been profitable since last year. FY 2010 revenues were $28 million and FY 2011 sales are projected to be $33 million. The majority of the revenues are generated from Orange, Telefonica’s O2 and SFR.
Enterprise Value: $300mm-$350mm
EV/2011 Revenue Multiple: 9.1x-10.7x
Comparable transactions include TCS’ acquisition of Networks in Motion for $170mm in December 2009, Vodafone’s acquisition of Wayfinder for $27mm in December 2008, Nokia’s acquisition of Navteq for $7.6b in August 2007, TomTom’s acquisition of TeleAtlas for 3.8b in July 2007 and Nokia’s acquisition of Gate5 for $250mm in August 2006.
Strategic Rationale
Intel is in the midst of transitioning its core business to address the exploding popularity of mobile devices. Software is an important element of their mobile strategy. Maps and location-aware search, navigation and marketing are table stakes in the game of attracting mobile application developers. Intel’s joint efforts with Samsung, AppUp and a number of other Intel mobile initiatives will benefit from Telmap’s capabilities.
Architect Partners’ Observations
1) Telmap was one of very few full featured, independent geolocation platforms remaining which helped achieve a strong valuation outcome.
2) As highlighted by Marc Prioleau, our everything location expert friend, application developers are increasingly recognizing that “free” map APIs from the Google’s of the world are not really free at all. The application developer is essentially outsourcing everything maps and location-centered, thereby losing important application user context, data and marketing and advertising revenue.
3) Intel is competing in a very crowded mobile application development platform market with the likes of Google, Apple, Nokia, Microsoft, Samsung, Adobe and Alcatel-Lucent among plenty of others.
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