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WirelessDevNet.com Press Release
TeleCommunication Systems Acquires Former Autodesk Unit LocationLogic
Annapolis, MD - May 19, 2009 - TeleCommunication Systems, Inc. (TCS) (NasdaqGM: TSYS), a global leader in mission-critical wireless communications technology, has acquired the assets of privately-held LocationLogic LLC, a leading provider of infrastructure, applications, content provisioning, and integration services for deploying and maintaining innovative location-based services (LBS).
TeleCommunication Systems acquired LocationLogic in a transaction structured as an asset purchase for approximately $25 million, comprised of $15 million paid in cash and $10 million, or approximately 1.4 million shares, in TCS Class A common stock, valued using the volume weighted average stock price for 10 days prior to close. LocationLogic assets were acquired by private equity investors Hale Capital Partners and Hale Global from Autodesk earlier in 2009.
Substantially all of the LocationLogic revenue stream is recurring service revenue from hosted infrastructure software and location-based applications, providing high visibility to future revenues. Based on 2009 run rate revenues of $18 million and EBITDA of $5 million from customers which include two leading US wireless carriers, TCS expects the acquisition to be immediately accretive in 2009.
The U.S. consumer LBS space is one of the most dynamic areas of mobility and continues to transform the mobile Internet experience. In a January 2009 Frost & Sullivan report on LBS companies, TCS was shown to offer the most complete LBS solution, followed by LocationLogic. Carriers who have added a location component to popular services -- like messaging, mapping, mobile search, emergency assistance services, games, or premium information -- have experienced rapid, increased customer usage. Both IDC and Gartner believe wireless carriers incorporating location information with contextual data will find significant new opportunities for capturing revenue. IDC anticipates total annual U.S. consumer LBS revenue to increase from $270 million in 2007 to $2.1 billion in 2012, or a 50% compounded annual growth rate.
"The addition of LocationLogic assets strengthens TCS in four significant ways," said Maurice B. Tosé, TCS chairman and CEO. "First, it enhances our LBS infrastructure platform, providing key authentication and privacy technology to better position us to win new carrier business. Second, LocationLogic expands our LBS application portfolio beyond navigation, traffic, and points of interest by adding family locator, mobile resource management, and phone recovery and security applications. Third, it deepens our longstanding relationships with two of the largest North American carriers and leaders in LBS. And fourth, the acquisition adds about 10 patents and 12 patent applications that are complementary to our existing patent portfolio. Overall, we expect this acquisition to further solidify our LBS leadership in an industry which is at the early stages of what is widely viewed as a long term, high growth market."
TCS was advised by Wedbush Morgan Securities in this transaction.
Conference Call
TCS held a conference call on May 19, 2009 to discuss the details of the LocationLogic acquisition and an update to fiscal 2009 guidance. The company's chairman, president and CEO, Maurice B. Tosé, and senior vice president and CFO, Tom Brandt, will host the call. A question and answer session followed management's presentation.
A replay of the call will be available after 4:00 p.m. Eastern time on the same day and until June 19, 2009:
Toll-free replay number: 1-800-753-4652
International replay number: 1-402-220-4235
(No passcode required)
About LocationLogic
LocationLogic, formerly Autodesk's Location Services Business, is a leading provider of infrastructure, applications, content provisioning, and integration services for deploying and maintaining innovative location-based services (LBS). The company's business and consumer applications and platform software provide location-enabling services and tools to deploy reliable, high-performance applications that deliver personalized, location relevant information for wireless users. LocationLogic personnel and facilities are in the San Francisco Bay area, Overland Park, Kansas, and Calgary, Alberta Canada. For more information, go to www.locationlogic.com.
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