Garmin Ltd (NASDAQ: GRMN), the global leader in GPS navigation devices, announced they have purchased one of their biggest competitors in Europe – Navigon AG. Garmin’s interest in Navigon seems to be mainly for its smartphone apps and in-vehicle GPS systems, particularly in the European market where Navigon has invested heavily and built relationships with a number of vehicle manufacturers.
Navigon is well known in the iOS community for its very popular MobileNavigator series of turn-by-turn GPS apps. Navigon also manufactures a number of portable navigation devices as well as developing software for PNDs and other smartphone platforms.
Acquiring a company that is popular for navigation apps is definitely a smart move f0r Garmin. Although one of the largest GPS navigation product manufacturers, Garmin was relatively late in releasing its own turn-by-turn GPS app for the iOS platform, debuting its StreetPilot application for iOS only six months ago after an earlier announcement in November that it was abandoning its own Nuvifone GPS smartphone product.
Garmin’s president and COO Cliff Pemble highlighted the strategic nature of Navigon’s application portfolio, stating that “With Navigon, we are also acquiring one of the top-selling navigation applications for the iPhone and Android platforms – something that we expect will help drive revenue for the combined company going forward.”
With Garmin’s resources, the new subsidiary is expected to perform quite well. Prior to this deal, Garmin lacked presence in the European market. Chief of automotive business development, Roger Jollis, said Garmin sees the car industry as a key growth driver for years ahead.
Navigon will operate as a subsidiary of Garmin. Navigon currently has about seven percent of the European market for portable navigation devices. Navigon’s current annual sales are about 130 million euros ($187 million).
Financial terms of the deal were not disclosed but industry experts are estimating the company was acquired for roughly $70 million USD.