MiTAC International Corp (神達電腦) said it has acquired the global positioning system (GPS) unit from its customer Brunswick Corp for US$16 million in cash, aiming to become No. 2 in the global GPS market.
The acquisition includes the GPS brand Navman and Brunswick's GPS marketing and research affiliates in Europe, Hong Kong and Shanghai, MiTAC said in a statement filed with the Taiwan Stock Exchange on Saturday night.
MiTAC plans to market its GPS products under the dual brands "Navman and Mio, which will help it make progress to grab the world's second-biggest brand in terms of market share," the statement said.
MiTAC now ranked No. 4 in the world's branded GPS devices.
MiTAC's global market share will now account for 17.6 percent in the wake of the transaction. Navman held 8.7 percent of the global GPS market and MiTAC's Mio brand had 8.9 percent in the third quarter of last year, the statement said.
The statement came less than a month after the Taiwanese company said it was in talks with Illinois-based Brunswick to buy the GPS unit.
MiTAC will seek greater exposure in the world's fastest-growing European and Australia markets, where Navman dominated, the statement said.
"This event [the purchase] would be more likely to bring a positive impact [on MiTAC], rather than negative one in our view," Vincent Chen (陳豊丰), a CLSA Ltd analyst, in a report released late last month.
Combining Mio and Navman, MiTAC's shipment of GPS units would exceed, or tie with Garmin at global No. 2 position after Tom Tom NV.
The purchase of the Navman brand would add about 20 to 25 percent annual growth to MiTAC's GPS shipments this year, since Brunswick sold 1 million Navman-branded GPS devices a year, Chen said.
MiTAC plans to ship a total of 7 million GPS devices this year, including those made for other companies -- an increase of 33 percent from 4.5 million units last year.
The acquisition of the Navman brand has also highlighted MiTAC's intention to gradually shift its focus to portable wireless communications products -- such as GPS devices and mobile phones with navigation functions -- the company said.
Last year, GPS products made up for less than 40 percent of MiTAC's total revenues of NT$82.88 billion. The company also makes servers and desktop computers.
Chen gave a "buy" rating on MiTAC, citing an extremely cheap valuation without giving a target price.
The stock is trading at 8.5 times its earnings this year, he said.
The share price of MiTAC has fallen 6.73 percent to last Friday's closing price of NT$36.7 since the beginning of the year.
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