Trimble to Buy Trucking Software Firm TMW Systems for $335M

Published: September 4, 2012

by Alex Woodie

Trimble Navigation Limited, a publicly traded provider of positioning solutions used by government and industry, has signed a definitive agreement to acquire trucking software developer TMW Systems for $335 million. The deal will net Trimble several IBM i-based enterprise trucking software systems, and hundreds of IBM i customers.

TMW had consolidated much of the market for dispatching and fleet management solutions since being acquired by two private equity firms, Wachovia Capital Partners and Peppertree Capital Management, back in September 2005. At that time, TMW was just one of the players in the trucking ERP business, and peddled two core dispatching systems, including TL2000 for the IBM i server and TMWSuite for Windows.

In 2006, flush with private equity money, the Beachwood, Ohio-based company bought Maddocks Systems, which developed a Windows-based dispatching program called TruckMate. In 2007, it bought TMT Software, which developed fleet maintenance solutions for Windows and IBM i. Also in 2007, it bought ISDC, a provider of truck routing software. In 2009, it bought Innovative Computing, a Tennessee-based company with more than 300 users of its IBM i-based IES suite. Finally, in 2011, it bought Appian, provider of routing and scheduling tools used by its TL2000, TMWSuite, TruckMate, and IES suites.

When it was all said and done, TMW had grown from about 575 customers before the acquisitions to about 1,800 customers. The company's software is used by many of the biggest trucking firms in North America, with a total of 400,000 power units (tractors) and more than 1.2 million assets (tractors and trailers) worldwide. TMW had about 500 employees when the deal with Trimble was announced in late August.

Trimble, which had revenues of $1.6 billion in 2011, has been a partner of TMW for years with its GPS-based truck- and trailer-tracking technology. When the deal is done, Trimble will also have ERP software to sell to its trucking-company customers who don't use TMW software to manage their fleets. TMW will benefit by expanding the software firm's reach beyond North America, said TMW president and CEO David Wangler.

When the deal with Trimble is finalized, TMW be nestled into Trimble's Mobile Solutions segment, the company says. It's a "highly synergistic" deal, says Ron Konezny, general manager of Trimble's transportation and logistics division.

"With more fleets deploying information-based solutions to improve business performance, the tight integration enabled by this transaction can offer a more comprehensive and seamless solution, enabling a continuous flow of information between customer, shipper, carrier, and driver," Konezny stated in a press release.

It's unclear whether TMW's partnerships with other firms providing location and positioning technology services will survive. Notable, the alliances Qualcomm Enterprise Services, TrackPoint Systems, and Terion (now owned by GE Equipment Services), could invite unwanted competition with the Trimble offerings. Other partnerships, such as those with Add On Systems, ALK Technologies, and many others, will likely be viewed as additive to the deal.

Trimble offers a wide variety of location and positioning technology and services. The company was founded in Silicon Valley in 1978 by three former Hewlett-Packard employees to develop solutions in the nascent positioning industry. Initially, the company worked with LORAN ground-based navigation systems for the near-shore marine market. However, Trimble's direction changed soon after the U.S. Government launched the first GPS satellite, NavStar.

In the early 1980s, Trimble was one of the first companies to manufacture GPS receivers. In those days, the focus was on trans-ocean ship navigation and geologic surveys for oil and gas companies, and other geographic information system (GIS) uses. When the company went public on NASDAQ in 1990, it was selling products that combined GPS navigation with communication, enabling long-haul truckers, for example, to stay in touch with headquarters. By the mid-'90s, it had shrunk its GPS receivers to the size of a PC card, and combined cellular communication and GPS onto a single chip.

Since 2000, Trimble has acquired or partnered its way into a variety of markets for innovative GPS usage. It partnered with Caterpillar for tracking earth-moving equipment, and with Nikon for advanced integrated survey equipment. It bought Apache Technologies for its laser technology, APS for its mobile public safety software, and MTS for its workforce automation software in the direct store delivery (DSD) business.

The company, which has a market capitalization of $6 billion, has completed dozens of acquisitions over the last decade to keep it at the forefront of products that, as the company says, "[change] the way work is done by linking positioning to productivity."

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