TCS Acquires LocationLogic (Autodesk) for $25 Million
Posted Wed, 20 May 2009 13:05:39 EDT by Dominique Bonte
Location based platforms and services provider TeleCommunication Systems announced the acquisition of California-based privately held LocationLogic, Autodesk’s former Location Services Business which was acquired by Hale Capital Partners earlier this year following Autodesk’s decision to focus on its main business. The deal is expected to be closed before the end of June for a total asset purchase of $25 million, $15 million paid in cash and $10 million in shares. No personnel reductions (LocationLogic counts 28 employees) or other cost savings are planned.
LocationLogic provides location infrastructure, middleware, applications, and content as well as integration services with Verizon’s Chaperone family finder and Sprint’s Mobile Locator workforce tracking and resource management applications as the most important implementations yielding stable recurring revenue streams from an installed based of more than 7 million users. LocationLogic’s 2009 run rate revenues amount to $18 million.
This acquisition reinforces the position of TCS as a leading LBS vendor in a consolidating LBS ecosystem. LocationLogic provides TCS with complementary capabilities in authentication and privacy management, completes the LBS application portfolio and enhances the relationship with the 2 most important carrier LBS providers in the US. LocationLogic also brings 10 LBS patents and 12 patent applications.
The news about this acquisition follows an earlier announcement about an agreement with Indian operator Tata. It is clear TCS follows a carrier-centric approach leveraging its assets to provide LBS infrastructure, middleware and applications as a turn key solution. While some observers point out that a carrier-only approach is not without risks – due the rising number of carrier-independent LBS offers in the market – for the time being carriers remain the preferred route to market in the US guaranteeing market exposure and stable recurring revenues in stark contrast with LBS applications available on many application stores for a one off amount of $10 or less.