According to German daily newspaper Financial Times Deutschland, Garmin has entered into exclusive talks to buy German navigation software supplier Navigon. The price is estimated around â‚¬50 million, wrote the newpaper according to a source involved with the deal. The sale could happen in June.
GPS Business News spoke to a Navigon spokesperson that declined to comment on the FT Deutschland article.
Navigon is currently owned at 90 percent by private equity firm General Atlantic. The firm took over the company in May 2008, (read here), increasing its stake from 25 percent to 90 percent.
In the fall of 2010 Navigon had streamlined its staff, making redundancies in its research and development team in WÃ¼rzburg and Hamburg (read here). Prior to that Navigon had already outsourced some of its software development to Romania.
For Garmin this acquisition means an increased commitment to the European market, bringing on board around 370 new European associates.
More importantly it is for Garmin a way to move forward its position in the automotive industry. Besides its European PND business and global mobile navigation offering, Navigon has developed ties with German car manufacturers and signed contracts to provide its navigation solution to dashboards.
In a recent interview with GPS Business News, Jochen Katzer, product manager automotive at Navigon, told us his company is currently developing a low cost in-dash navigation solution for an undisclosed car manufacturer (read here) that will be on the market after the summer.
According to rumors heard in the last few months, mobile navigation supplier TeleNav could have also been interested in the acquisition of Navigon.
Navigon had been for sale for several years but the financial crisis and the advent of free mobile navigation solutions from Nokia and Google did not help to sell the company earlier. A â‚¬50 million price tag seems to be quite a bargain for Navigon. It is definitely indicative of the value associated with navigation software these days.
Despite the “no comment“ answer from Navigon, FT Deutschland has been known in the past for reliable information about the company. The newspaper already broke the story in 2008 when General Atlantic took over Navigon.