Bridgestone buying Tomtom Telematics for 910 million euros
Tyremaker aims to create ‘fleet solutions powerhouse’
Bridgestone Europe NV/SA, the Europe Middle East and Africa (EMEA) subsidiary of Bridgestone Corporation, has entered into an agreement with TomTom to acquire its telematics business for a cash consideration of 910 million euros. Michelin had also been named as a suitor for the business when the news that TomTom Telematics was for sale emerged in November 2018.
Bridgestone is funding the 910 million euro acquisition with “available cash on the balance sheet” and the business is expected to be EPS accretive in year one. The transaction is scheduled to be completed in the second quarter of 2019.
According to Bridgestone, the goal is to fuse the world’s largest tyre maker with the leading provider of digital fleet solutions in Europe, creating a “fleet solutions powerhouse”. In short Bridgestone hopes the deal will allow it to cross-sell tyres and solutions to a larger customer base. In addition, the data access the combination brings is intended to enhance Bridgestone’s virtual tyre development and testing as well as connected tyre innovation benefiting all customers including OEMs.
To a great extent the deal is driven by changing vehicle ownership models, which is resulting in the growing importance of fleets over individually-owned vehicles for transportation of people and goods. At the same time, increasing demand in the transportation industry means that fleet owners and managers need to maximise productivity and minimise total cost of ownership more than ever.
This latest investment builds on previous work at Bridgestone to strengthen its digital capabilities in EMEA. Specifically, the company has built capabilities in data collection from sensors, data platforms and analytics. This has resulted in the launch of a range of digital solutions and applications such as Tirematics, Mobox, FleetPulse and Bridgestone Connect.
TomTom’s large user base
TomTom Telematics has a large and growing installed user base of 860,000 vehicles of which more than two thirds are commercial. According to Bridgestone, TomTom Telematics has “a tailored go-to-market system and a premium digital offering including WebFleet and NextFleet”. The company handles on average over 800 million GPS positions, 3.3 million trips, and 200 million inbound messages per day.
Paolo Ferrari, CEO and president of Bridgestone EMEA, executive vice president of Bridgestone Group, said: “We have found our perfect match in TomTom Telematics. Our complementary assets and capabilities will create a fleet solutions powerhouse and will further strengthen Bridgestone’s digital technology arm. Beyond scale, there would be considerable benefits by complementing our offerings, allowing us, among many other opportunities, to sell tyres and solutions across our customers. We are now well-positioned in EMEA to accelerate our data-driven business, expand our fleet customer base and seize fast-growing, profitable opportunities in the automotive mobility industry.”
“We recognise and respect the talent and skill of TomTom Telematics’ management team and its 670 employees. It’s our intention to foster and grow the business and support its current plans. We want TomTom Telematics to continue serving its customers as successfully as it has done over the last few years and take advantage of its number one position in a fast-growing market.”
“After a thorough review of multiple strategic options, we have determined that the sale of TomTom Telematics to Bridgestone is in the best interest of both TomTom Telematics and our core location technology business,” commented Harold Goddijn, CEO, TomTom. “We will continue to invest in our innovative map-making system, enabling faster map updates while lowering operational costs, paving the road towards autonomous driving.”
“TomTom Telematics is the number one Telematics Service Provider in Europe, and we continue to grow our installed base of vehicles we service globally,” added Thomas Schmidt, managing director, TomTom Telematics. “We look forward to accelerating our ambitious growth plan and seizing new opportunities as part of Bridgestone. In the meantime, we expect the transition to be seamless with no disruption for our customers, suppliers and employees.”