TomTom Craves Rich Price That Nokia’s Maps Unit Found: Real M&A
2015-08-03 17:54:59.949 GMT
(For a Real M&A column news alert: {SALT REALMNA <GO>}.)
By Tara Lachapelle
(Bloomberg) -- Nokia Oyj’s sale of its maps business is
putting TomTom NV in play. But the Dutch competitor might not
yet be worthy of an equally rich takeover bid.
A group of German carmakers are valuing Nokia’s HERE
division at a price that implies about 2.9 billion euros ($3.2
billion) for TomTom, or about 25 times earnings before interest,
taxes, depreciation and amortization, according to data compiled
by Bloomberg.
That works out to about 13 euros a share, or 30 percent
higher than TomTom’s current price -- a premium TomTom’s
minority shareholders would probably welcome. Its stock hasn’t
traded that high in six years and few analysts forecast it will
return to that level on its own during the next year.
TomTom is exploring options that could lead to a sale, and
it’s attracting companies and investors who were looking at
Nokia’s HERE, people familiar with the matter said. Richard
Piekaar, a spokesman for TomTom, said the company isn’t
“talking to anybody about a sale.”
Nokia agreed Monday to sell HERE to BMW AG, Audi AG and
Daimler AG for 2.8 billion euros. Uber Technologies Inc.
considered teaming up with Baidu Inc. and Apax Partners to bid
for HERE, people said earlier this year.
While TomTom is among the few digital-map assets that make
viable targets for car manufacturers and technology giants such
as Apple Inc. and Uber, the company trails HERE in market share
in the automotive industry.
Timing Issue
TomTom Chief Executive Officer Harold Goddijn has said that
2016 is the year automotive orders will pick up and contribute
to growth. Goddijn and other executives together own nearly half
the company.
It may be premature to think about selling, said Thomas
Picherit, an analyst for AlphaValue in Paris.
“The positive turnaround of the automotive segment at
TomTom will only start to pay off starting in the first quarter
of 2016, so management would be selling early” to do so now,
Picherit said. “This would be out of character given that they
have always taken a long-term approach to the development of
TomTom.”
By acquiring HERE, the German consortium is gaining
technology for connected cars, bringing them a step closer to
self-driving vehicles. Those carmakers held preliminary talks
with TomTom as an alternative deal, people with knowledge of the
matter said.
With Apple also in the race for driverless cars, that
leaves a potential buyer for TomTom that has plenty of cash for
a purchase.
“I would have expected Apple to be the first one securing
independent access to the maps business, and they’ve got tons of
money to spend, so it wouldn’t be a big deal for them,” Marcel
Achterberg, an Amsterdam-based analyst for Petercam, said in a
phone interview. “But TomTom’s management has always been quite
clear that they want to build the company independently.”
For Related News and Information:
TomTom Said to Weigh Options Including Sale Amid Nokia Deal
German Carmakers to Buy Nokia’s HERE Maps for $3.1 Billion
Nokia HERE Sale at 11% TomTom Premium May Reflect Auto Momentum
Real M&A columns: NI REALMNA <GO>
Top deal stories: {DTOP <GO>
--With assistance from Elco van Groningen in Amsterdam and
Kasper Viita and Aaron Kirchfeld in London.
To contact the reporter on this story:
Tara Lachapelle in New York at +1-212-617-8911 or
tlachapelle@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman
2015-08-03 17:54:59.949 GMT
(For a Real M&A column news alert: {SALT REALMNA <GO>}.)
By Tara Lachapelle
(Bloomberg) -- Nokia Oyj’s sale of its maps business is
putting TomTom NV in play. But the Dutch competitor might not
yet be worthy of an equally rich takeover bid.
A group of German carmakers are valuing Nokia’s HERE
division at a price that implies about 2.9 billion euros ($3.2
billion) for TomTom, or about 25 times earnings before interest,
taxes, depreciation and amortization, according to data compiled
by Bloomberg.
That works out to about 13 euros a share, or 30 percent
higher than TomTom’s current price -- a premium TomTom’s
minority shareholders would probably welcome. Its stock hasn’t
traded that high in six years and few analysts forecast it will
return to that level on its own during the next year.
TomTom is exploring options that could lead to a sale, and
it’s attracting companies and investors who were looking at
Nokia’s HERE, people familiar with the matter said. Richard
Piekaar, a spokesman for TomTom, said the company isn’t
“talking to anybody about a sale.”
Nokia agreed Monday to sell HERE to BMW AG, Audi AG and
Daimler AG for 2.8 billion euros. Uber Technologies Inc.
considered teaming up with Baidu Inc. and Apax Partners to bid
for HERE, people said earlier this year.
While TomTom is among the few digital-map assets that make
viable targets for car manufacturers and technology giants such
as Apple Inc. and Uber, the company trails HERE in market share
in the automotive industry.
Timing Issue
TomTom Chief Executive Officer Harold Goddijn has said that
2016 is the year automotive orders will pick up and contribute
to growth. Goddijn and other executives together own nearly half
the company.
It may be premature to think about selling, said Thomas
Picherit, an analyst for AlphaValue in Paris.
“The positive turnaround of the automotive segment at
TomTom will only start to pay off starting in the first quarter
of 2016, so management would be selling early” to do so now,
Picherit said. “This would be out of character given that they
have always taken a long-term approach to the development of
TomTom.”
By acquiring HERE, the German consortium is gaining
technology for connected cars, bringing them a step closer to
self-driving vehicles. Those carmakers held preliminary talks
with TomTom as an alternative deal, people with knowledge of the
matter said.
With Apple also in the race for driverless cars, that
leaves a potential buyer for TomTom that has plenty of cash for
a purchase.
“I would have expected Apple to be the first one securing
independent access to the maps business, and they’ve got tons of
money to spend, so it wouldn’t be a big deal for them,” Marcel
Achterberg, an Amsterdam-based analyst for Petercam, said in a
phone interview. “But TomTom’s management has always been quite
clear that they want to build the company independently.”
For Related News and Information:
TomTom Said to Weigh Options Including Sale Amid Nokia Deal
German Carmakers to Buy Nokia’s HERE Maps for $3.1 Billion
Nokia HERE Sale at 11% TomTom Premium May Reflect Auto Momentum
Real M&A columns: NI REALMNA <GO>
Top deal stories: {DTOP <GO>
--With assistance from Elco van Groningen in Amsterdam and
Kasper Viita and Aaron Kirchfeld in London.
To contact the reporter on this story:
Tara Lachapelle in New York at +1-212-617-8911 or
tlachapelle@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman