) recently announced that it has acquired privately-held TMW
Systems in an all-cash deal. The acquisition, for which the company
will be spending $355 million, is expected to close during the
fourth quarter, subject to customary closing conditions.
Beachwood, Ohio-based TMW is a specialized software maker for
transportation and logistics industries. Its software not only
helps in storing and analyzing data but also automates the
processes involved in the movement of goods, helping to improve
operational efficiency. The company has annual revenues of roughly
Upon the completion of the deal, TMW's transportation software will
be added to Trimble's suite of mapping, tracking and surveying
equipment. TMW Systems will continue to operate as an independent
entity and will be reported within Trimble's Mobile Solutions (TMS)
The acquisition will enable Trimble to provide improved fleet
tracking technologies. The integrated solution can be used by
managers for better decision making and operational efficiency.
Currently, Trimble and TMW Systems operate together on a number of
fleets, wherein TMW's enterprise software is already integrated
within Trimble's mobile solutions. According to management, the
acquisition will allow both the companies to jointly serve more
than 3,000 fleets around the world.
Though management stated that the transaction is expected to be
slightly dilutive to Trimble's non-GAAP earnings by 1 to 3 cents
per share in the fourth quarter, it expects a 12 to 14 cents
accretion in 2013.
Trimble is quite active on the mergers and acquisitions (M&A)
front. The company's acquisitions have helped it to build a desired
portfolio, enhance its product line and expand top-line growth.
Acquisitions have also been positive for gross margins, while
adding operating leverage. Earlier this year, Trimble acquired a
3-D modeling software platform from Internet search giant
). The purchase price for the software was not revealed.
Trimble Navigation, Ltd. is an original equipment manufacturer
(OEM) of positioning, surveying and machine control products. In
the last-reported second quarter of 2012, TMS segment revenue of
$81.4 million was up 3.9% sequentially and 102.4% from the
comparable quarter of 2011. Trimble has been putting in a lot of
effort, disposing off non-focus areas and building a desired
portfolio through successive acquisitions. The acquisition is
expected to further enhance the performance of commercial vehicles
and fleets, driving revenue in this segment.
Trimble's solid portfolio (enhanced by acquisitions), strong market
position and strategic partnerships are expected to drive both
revenue and earnings over the next few quarters.
Currently the shares of Trimble retain a Zacks #3 Rank
(short-term "Hold" rating).
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