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WirelessDevNet.com Press Release
Trimble to Acquire @Road
SUNNYVALE, Calif., Dec. 10 -- Trimble (Nasdaq:
TRMB) today announced that it has entered into a definitive agreement to
acquire @Road, Inc. (Nasdaq: ARDI) of Fremont, Calif. Under the terms of
the transaction, Trimble will acquire all of the outstanding shares of
@Road for $7.50 per share. @Road shareholders will receive $5.00 per share
in cash and the remaining $2.50 per share in consideration will be a
mixture of cash and/or Trimble stock to be determined at Trimble's sole
discretion.
The transaction equity value is approximately $496 million. After
subtracting @Road's net cash position of approximately $79 million, the
transaction enterprise value is $417 million. The transaction will be
accounted for as a purchase.
Strategic Rationale
-- Enables Mobile Resource Management (MRM) Leadership: The acquisition
expands Trimble's investment and reinforces the existing growth
strategy for its Mobile Solutions (TMS) segment. It also positions
Trimble as a market leader in providing MRM solutions. In addition to
its industry-leading technology, @Road has developed deep domain
expertise and a strong field service management capability within its
MRM solution set to address challenges faced by a variety of
industries, including transportation, distribution,
telecommunications, cable, field service, utilities, facilities
management and public works. This complements Trimble's existing
domain expertise in the construction supply, direct store delivery,
public safety and utilities industries.
-- Increases Access to Fast Growing, Global MRM Segment: According to
Frost and Sullivan, the emerging MRM segment is expected to grow to
approximately $2.6 billion by 2010, up from approximately $1.2 billion
in 2006. With the acquisition of @Road, Trimble is well positioned to
capitalize on this growing, global market opportunity.
-- Reinforces Trimble's Existing Businesses: A number of Trimble's
existing businesses have the potential to add software products based
on a recurring service model. The combination of @Road and Trimble
will enable more aggressive development of these categories of
products and can leverage Trimble's existing capabilities and presence
in those markets.
-- Extends Trimble's Technology Platform: @Road has made significant
investments in world-class, fault tolerant and scalable software
infrastructure that can support a large increase in subscribers with
minimal additional investment. This enables Trimble to forego a
similar investment and rapidly deploy new applications to serve
additional customers.
-- Accelerates the Pace of Product Innovation for Customers: The
combination of @Road's industry-leading MRM solutions with Trimble's
capabilities will both speed the rate at which new products will be
brought to market and will increase the diversity of those products.
-- Enhances Customer Access through Strong Channel Relationships: Trimble
is well positioned to leverage @Road's extensive network of well-
established relationships with telecom carrier partners, large system
integrators, and enterprise software technology providers to enhance
the combined company's reach, product capabilities and solutions
platform. In addition, Trimble's significant existing international
presence will enable an accelerated international expansion for the
combined business.
Significant operating leverage is available to the combined entity. The
sources of leverage include the ability to reduce costs by sharing common
infrastructure elements and to achieve growth objectives by leveraging
existing capabilities at little incremental cost. Examples include the
consolidation of data centers, the consolidation of product platforms,
leveraging sales force and distribution channels, the utilization of
Trimble's international infrastructure and the reduction of public company
compliance costs.
"@Road is widely recognized for its strong technology base and its
success with enterprise customers. The addition of @Road to Trimble's
existing TMS product offerings will enable us to provide a broader and more
robust platform," said Steven W. Berglund, president and CEO of Trimble.
"The anticipated growth rates for MRM make this combination an attractive
addition to the Trimble portfolio. It reinforces our other successful
investments within TMS and represents a major step in building leadership
in MRM. We look forward to the addition of the @Road team as we continue to
grow and build shareholder value."
"We are pleased to join Trimble and it is an excellent fit for @Road,"
said Krish Panu, president and CEO of @Road. "Our goal has always been to
provide the best MRM solution, from product design to our ongoing customer
support. Trimble shares this vision of excellence. We believe the
acquisition will enable even better customer service, while enabling our
employees worldwide to continue to provide leadership in our markets."
Financial Structure and Transaction Timing
Of the $7.50 per share of consideration, @Road shareholders will
receive $5.00 per share in cash. For the remaining $2.50 per share portion
of the consideration, Trimble will make a determination about the mixture
of cash and stock consideration before the @Road shareholder vote date. The
closing of the transaction, which is expected during the first quarter of
2007 after the @Road shareholder vote, will be subject to regulatory
approval and other usual conditions. The transaction is not subject to a
Trimble shareholder vote.
Trimble expects to finance the cash portion of the transaction from
cash on its balance sheet, available borrowings under its existing bank
credit facility and a new term loan.
Krish Panu, each of the other executive officers and directors of @Road
and @Road's largest stockholder, representing an aggregate of approximately
23 percent of the outstanding shares of @Road's common stock, have agreed
to vote in favor of the transaction.
@Road will be reported within Trimble's Mobile Solutions (TMS) business
segment.
Goldman, Sachs & Co. acted as the financial advisor to Trimble and J.P.
Morgan Securities Inc. acted as financial advisor to @Road.
Preliminary 2007 Pro Forma Outlook
Assuming a February close of the transaction, Trimble currently expects
total 2007 Company revenue between $1,140 and $1,170 million. Of this
amount, approximately $80 million to $85 million in revenue is expected to
come from the acquisition of @Road. The expected revenue contribution from
@Road in 2007 is expected to be significantly impacted by the write-off of
all deferred revenue of approximately $28 million at closing and the
partial year impact of a February close.
Trimble expects full-year 2007 non-GAAP earnings per share of between
$2.10 and $2.15 in 2007. Trimble's baseline outlook for the Company,
excluding the acquisition, would have been $2.30 and $2.35 non-GAAP
earnings per share. The transaction is expected to be single-digit dilutive
in 2007 due to interest payments on debt, an assumed higher share count and
the deferred revenue write down of $0.07 per share, partially offset by
synergy savings and improved business profitability. Beyond 2007, the
transaction is expected to be accretive to non-GAAP earnings per share in
2008 and is expected to be meaningfully accretive to non-GAAP earnings per
share in 2009 and beyond.
Trimble will update its fiscal 2007 guidance on the Company's regularly
scheduled quarterly conference call on January 25, 2007.
Non-GAAP vs. GAAP Financials
The Company excludes the amortization of purchased intangibles,
in-process research and development, acquisition related step-up charges,
restructuring charges, and the impact of stock-based compensation in
computing non-GAAP measures because the chief executive officer excludes
these items when budgeting and evaluating the business. These non-GAAP
financial measures are not intended to supersede or replace the Company's
GAAP results.
Investor Conference Call / Webcast Details
Trimble will hold a conference call on December 11, 2006 at 8:30 a.m.
EST to discuss the @Road acquisition. It will be broadcast live on the Web
at http://www.trimble.com. Dial-in will be available by calling (800) 528-9198
(U.S.) or (706) 634-6089 (international) and the passcode is 3747759. A
replay of the call will be available for 30 days beginning at 12:00 p.m.
EST on December 11, 2006. The replay number is (800) 642-1687 (U.S.) or
(706) 645-9291 (international), and the pass code is 3747759.
About Mobile Resource Management - A Growing Industry
Mobile Resource Management (MRM) business solutions are designed to
maximize the productivity of mobile workforces. Next-generation solutions
are expected to include more than just fleet and asset management tools.
Growth in the industry is expected to be fueled by combining Internet
services with on- demand applications that leverage a variety of
technologies including Global Positioning System (GPS), dispatch software,
wireless communications, fleet management tools and transaction processes
to help companies reduce operating costs and more effectively manage a
mobile workforce. The ability to track, locate, and manage assets can be
critical to a company's overall performance and bottom line. By reducing
costs through fewer lost assets, enhanced equipment utilization, reduced
out-of-route miles, and 'just-in-time' inventory availability, MRM is
expected to transition from a premium service to a standard component of
most businesses with fleets and multiple assets.
About @Road
@Road, Inc. is a leading global provider of solutions designed to
automate the management of mobile resources and to optimize the service
delivery process for customers across a variety of industries. @Road
delivers Mobile Resource Management solutions in three key areas: Field
Force Management, Field Service Management and Field Asset Management. By
providing real-time Mobile Resource Management infrastructure integrating
wireless communications, location-based technologies, transaction
processing and the Internet, @Road solutions are designed to provide a
secure, scalable, upgradeable, enterprise- class platform, and are offered
in on-demand software delivery, on-premise or hybrid environments that can
seamlessly connect mobile workers in the field to real-time corporate data.
@Road is headquartered in Fremont, Calif., and has a global presence with
offices in North America, Europe and Asia. For more information on @Road
solutions, visit http://www.road.com.
About Trimble
Trimble applies technology to make field and mobile workers in
businesses and government significantly more productive. Solutions are
focused on applications requiring position or location-including surveying,
construction, agriculture, fleet and asset management, public safety and
mapping. In addition to utilizing positioning technologies, such as GPS,
lasers and optics, Trimble solutions typically include significant software
content specific to the needs of the user. Wireless technologies are
utilized to deliver the solution to the user and to ensure a tight coupling
of the field and the back office. Founded in 1978 and headquartered in
Sunnyvale, Calif., Trimble has a worldwide presence with more than 2,600
employees in over 18 countries.
For more information Trimble's Web site at http://www.trimble.com.
Certain statements made in this news release are forward looking
statements within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934, and are made
pursuant to the safe harbor provisions of the Securities Litigation Reform
Act of 1995. This press release contains forward-looking statements that
include the growth of the MRM segment, the effect of the @Road acquisition
on Trimble's Mobile Solutions business including the financial impact of
the acquisition in future periods, the pro forma outlook for Trimble, the
realization of synergies, the timing of closing of the proposed acquisition
and the expected financing sources. These forward looking statements are
subject to risks which could cause actual results to differ materially from
expected results. For example, the growth of the MRM segment might be
slowed due to the adoption of competing technology or a slow down in
technology spending generally. The financial impact of the @Road
acquisition on Trimble's Mobile Solutions business may be less positive
than expected if Trimble is not able to realize the synergies it
anticipates from the transaction. Trimble may be unable to achieve the
projected synergies if its acquisition takes longer than expected or if the
integration takes longer than expected or if the operation of the combined
business results in less administrative overlap than expected. The pro
forma outlook for Trimble is dependent upon the above synergies being
achieved as well as maintaining @Road's existing customer base. It is also
dependent upon general economic conditions, especially in the construction
and agriculture sectors. The timing of closing is dependent on the
satisfaction of certain conditions including the effectiveness of an S-4
Registration Statement and clearance under applicable antitrust regulatory
authorities. There can be no assurance that these conditions will be
satisfied or that the transaction will be consummated. Trimble's expected
financing sources could change based on conditions in the capital markets
and debt markets. Additional risks and uncertainties include the risks
inherent in acquiring and integrating a company and its products,
unanticipated expenditures and changing relationships with customers. Among
other things, economic trends and additional competitive issues may have an
adverse effect on the success of the acquisition and its integration. More
information about potential factors which could affect Trimble's business
and financial results is set forth in reports filed with the SEC, including
Trimble's quarterly reports on Form 10-Q and its annual report on Form
10-K. All forward looking statements are based on information available to
Trimble as of the date hereof, and Trimble assumes no obligation to update
such statements.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
ADDITIONAL INFORMATION ABOUT THE MERGER
AND WHERE TO FIND IT
Trimble and @Road intend to file with the SEC a prospectus/proxy
statement and other relevant materials in connection with the proposed
acquisition of @Road by Trimble pursuant to the terms of an Agreement and
Plan of Merger by and among Trimble, Roadrunner Acquisition Corp., a
wholly-owned subsidiary of Trimble, and @Road. The prospectus/proxy
statement will be mailed to the stockholders of @Road. Investors and
security holders of @Road are urged to read the prospectus/proxy statement
and the other relevant materials, as well as any amendments or supplements
to those documents, when they become available because they will contain
important information about Trimble, @Road and the proposed merger. The
prospectus/proxy statement and other relevant materials (when they become
available), and any other documents filed by Trimble or @Road with the SEC,
may be obtained free of charge at the SEC's web site at http://www.sec.gov. In
addition, investors and security holders may obtain free copies of the
documents filed with the SEC by Trimble by contacting Trimble Investor
Relations, 935 Stewart Drive, Sunnyvale, California 94085, (408) 481-7838.
Investors and security holders may obtain free copies of the documents
filed with the SEC by @Road by contacting @Road Investor Relations, 47071
Bayside Parkway, Fremont, California 94538, (510) 870-1317. Investors and
security holders of @Road are urged to read the prospectus/proxy statement
and the other relevant materials, as well as any amendments or supplements
to those documents, when they become available before making any voting or
investment decision with respect to the proposed merger.
Trimble, Steven Berglund, Trimble's President and Chief Executive
Officer, and Trimble's other directors and executive officers may be deemed
to be participants in the solicitation of proxies of @Road stockholders in
connection with the proposed merger. Investors and security holders may
obtain more detailed information regarding the names, affiliations and
interests of Mr. Berglund and Trimble's other directors and executive
officers in the solicitation by reading the prospectus/proxy statement when
it becomes available.
@Road, Krish Panu, @Road's Chairman, Chief Executive Officer and
President, and @Road's other directors and executive officers may be deemed
to be participants in the solicitation of proxies of @Road stockholders in
connection with the proposed merger. Such individuals may have interests in
the proposed merger, including as a result of holding options or shares of
@Road common stock. Investors and security holders may obtain more detailed
information regarding the names, affiliations and interests of Mr. Panu and
@Road's other directors and executive officers in the solicitation by
reading the prospectus/proxy statement when it becomes available.
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