Trimble(NASDAQ: TRMB) announced this morning that it has entered into a definitive agreement to acquire privately-held TMW Systems, Inc. TMW's enterprise software already integrates with Trimble's Transportation and Logistics solutions (PeopleNet), which the company acquired last summer. Together, the two organizations will jointly serve more than 3,000 fleets worldwide.
The all-cash purchase price of $335 million will be financed through Trimble's existing credit facility. The facility has terms and conditions for draw-downs that are typical in financing of this kind.
“We are just thrilled to get the chance to have TMW join Trimble. They will also be a part of Trimble’s Transportation and Logistics business, but we will remain separate companies,” Ron Konezny, general manager of Trimble's Transportation and Logistics Division told Fleet Owner.
“Both TMW and PeopleNet will continue to work with other providers, as we do now. TMW has over 175 partners. I hope that in the future, though, we will see more TMW/PeopleNet joint solutions,” he added. “Customers can sometimes get frustrated with having separate communications and software solutions providers… I honestly think this is a game-changer. It would not work, however, if we did not share a common vision of commitment to the customer.
"This highly synergistic combination provides the potential for creating uniquely innovative solutions for the customer,’ Konezny added. “In addition to a shared market vision focused on customer value, TMW brings a history of robust double-digit growth, invention and strong financial performance. With more fleets deploying information-based solutions to improve business performance, the tight integration enabled by this transaction can offer a more comprehensive and seamless solution, enabling a continuous flow of information between customer, shipper, carrier and driver."
Qualcomm Enterprise Solutions (QES) is one of TMW’s long-term partners as well as a competitor with PeopleNet. Commenting on the acquisiton, Norm Ellis, QES VP of sales, services and marketing, said: “Qualcomm enjoys nearly a 20 year partnership with TMW as we share hundreds of customers together. We continue to have solid relationships and customer bases with all of the key TMS providers, including TMW, and believe the Trimble acquisition of TMW will not change and that TMW will continue to support the unique, integrated value we have developed through the years of working together—ultimately acting in the best interest of our joint customers. Just as we have always fostered open, unbiased relationships to ensure we’re able to do what’s right for each customer and work with all best-in-class providers, we expect TMW will continue to do the same as they have during our tenured relationship with them.”
"Trimble's global presence will provide a strong channel for extending TMW's reach and scope, beyond its leading position in North America," David Wangler TMW's president and CEO said."Together, our complementary technologies can deliver exceptional return on information that improves our customers' operational efficiencies and allows them to deliver superior customer service. We look forward to becoming a part of Trimble and providing our customers a comprehensive and integrated end-to-end solution for transportation management.
“TMW is very strong in the for-hire space and now we are also working with private fleets and the very large 3PLs,” Wangler told Fleet Owner. “[As a part of Trimble’s Transportation and Logistics business,] capabilities such as our asset maintenance solution, for instance, will find new applications in other vertical markets… We’ve had some international plans, which will now open up to us with Trimble.”
TMW Systems is based in Beachwood, OH and has 500 employees. According to Wangler and Konezny, the entire TMW executive team will be staying on and it is expected that all TMW employees will do the same.
“Trimble has acquired over 60 companies in the last ten years,” Konezny told Fleet Owner. “I expect this transition to go very well. PeopleNet’s own acquisition by Trimble is a good case study in how the company handles things. They are very supportive.”
TMW will be reported within Trimble's Mobile Solutions segment. A detailed description of the purchase agreement can be found in Trimble's current report on Form 8-K filed with the SEC on May 9, 2011. The transaction is expected to close in the fourth quarter of 2012, subject to customary closing conditions, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
TMW's reported trailing twelve month revenue is approximately $96 million. The transaction is expected to be slightly dilutive to Trimble's fourth quarter non-GAAP earnings per share by $0.01 to $0.03 per share, due to the impact of a one-time, non-cash write-down on a portion of TMW System's deferred revenue. Trimble expects the acquisition to be accretive to its 2013 non-GAAP earnings per share by $0.12 to $0.14 per share.