Trimble Agrees to Acquire TMW, Adding to Its Truck Tech Family
This story appears in the Sept. 3 print edition of Transport Topics.
Trimble Navigation Ltd. said it has agreed to purchase TMW Systems Inc. for $335 million in a deal that will bring the largest transportation software provider under the same ownership as PeopleNet Communications Corp., which Trimble acquired a year ago.
Company executives told Transport Topics that TMW and onboard communications firm PeopleNet will operate as independent businesses and will continue to work with other industry partners.
“The teams will clearly be collaborating, based on the market need, but they’ll be sister companies,” said Ron Konezny, the general manager of Trimble’s transportation and logistics division. “TMW will continue to work with leading onboard computer providers, and PeopleNet will continue to work with leading transportation software providers.”
Konezny, who founded PeopleNet, Minnetonka, Minn., in 1994, was appointed to his current post at Trimble in December. He was previously PeopleNet’s CEO.
The all-cash transaction is expected to close during the fourth quarter, Trimble said Aug. 27.
TMW will become part of Trimble’s Mobile Solutions segment, which also includes PeopleNet.
David Wangler, TMW’s president, said the Beachwood, Ohio, firm will retain its name and entire management team.
He said customers will not see changes to their services and that TMW will maintain its integrations with other onboard computing and communications firms besides PeopleNet, such as Qualcomm, XRS Corp. and Cadec Global Inc.
At the same time, PeopleNet said it will continue to work with fleet software providers other than TMW, including McLeod Software and Roadnet Technologies.
Wangler also said the Trimble deal creates opportunities for TMW to expand its international presence and broaden its reach into new industries, such as construction and agriculture.
The purchase of TMW by Trimble, a provider of Global Positioning System and other technologies, further expands Trimble’s presence into the transportation and logistics field.
TMW serves more than 2,000 customers who manage more than 500,000 power units. On its website, TMW says 77 of the 100 largest U.S. and Canadian for-hire carriers use its software, based on the 2011 TT Top 100 for-hire list.
“Trimble is absolutely committed to transportation and logistics,” Konezny said. “What Trimble is really good at is using technology to transform how people do their work, and transportation and logistics, globally, has a ton of opportunity for transformational application of technology.”
Trimble said it expects the TMW acquisition, whose revenue for the most recent 12 months was about $96 million, to boost its adjusted earnings per share by 12 to 14 cents in 2013.
Following the PeopleNet acquisition, which closed in August 2011, the revenue generated by Trimble’s Mobile Solutions segment more than doubled in the second quarter of 2012 to $81.4 million, from $40.2 million in the same quarter a year earlier.
PeopleNet President Brian McLaughlin said Trimble’s acquisition of TMW “will allow us to go even deeper with our integration with those guys, and work collaboratively on new product initiatives.”
TMW is PeopleNet’s largest integration partner in terms of shared customers, he said. The two companies have partnered on integration for more than 10 years.
Mark Cubine, vice president of marketing at TMW competitor McLeod Software, said that he does not expect the deal to affect McLeod’s partnership with PeopleNet, which he said is in both companies’ interest.
“It doesn’t change at all our intentions to have a strong integration solution with PeopleNet,” he said, adding that it is “not unusual in the business we serve to have integrations with people who are also competitors.”
McLeod currently has about 650 customers, Cubine said.
In-cab communications provider Qualcomm expects its nearly 20-year partnership with TMW to continue, said Norm Ellis, vice president of sales, services and marketing for Qualcomm’s Enterprise Services division.
“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,” he said in a statement.
Ellis said Qualcomm and TMW share “hundreds” of customers.
Jon Bernstein, executive chairman at Cadec, said TMW has been “a great partner” for his company and expects that relationship to continue.
XRS, formerly Xata Corp., also expects to continue integrations with TMW, said Christian Schenk, the company’s vice president of marketing.
He described Trimble’s acquisition of TMW as “a big move on the chess board.”
“Expect to see more of it,” Schenk said. “I don’t think we’ve seen the last of the consolidation.”
TMW, which has made five acquisitions in six years, will continue its growth strategy, Wangler said.
TMW purchased Appian Logistics Software in 2011, Innovative Computing Corp. in 2009, TMT Software and IDSC Corp. in 2007 and Maddocks Systems in 2006.
Sathyanarayana Kabirdas, an industry analyst at Frost & Sullivan, said the acquisition by Trimble should help TMW expand globally.
He also said Trimble’s model of allowing acquired companies to continue operating on their own has proven more successful than when firms make major changes to acquired businesses.
