Telematics Consolidation
Greg Reid, CFA (416) 642-3807; greid@wwcm.com April 14, 2009 – 2
Robert B. Winslow, CFA (416) 847-3403; rwinslow@wwcm.com
Telematics Consolidation – Still Looking For Someone to Take Charge....................................................................................1
Investment Summary and Outlook .............................................................................................................................................3
Consolidation to Continue as Smaller Players Orphaned by Market.......................................................................................3
Industry Landscape.....................................................................................................................................................................3
Painting a Picture of the Global Telematics Industry ..............................................................................................................3
Continued Acceleration in M&A Activity Likely .......................................................................................................................4
Case for Consolidation - Too Many Small Players..................................................................................................................4
Large Players Starting to Emerge ...............................................................................................................................................7
HUGHES Telematics – Large Pure-Play Publicly-Traded Co. Emerges ................................................................................7
ATX Group – Targeting the Connected Vehicle Service Provider Market .............................................................................8
OCTO Telematics – Huge European Insurance Subscriber Base ............................................................................................9
Continental Automotive Systems AG – Leading Hardware Supplier......................................................................................9
Canadian Landscape .................................................................................................................................................................10
Organic Growth Tapering Off during Tough Economic Times.............................................................................................10
Canadian Private...................................................................................................................................................................12
Playing Matchmaker – What Makes Sense?.............................................................................................................................14
Multiple Combinations and Permutations Possible ...............................................................................................................14
Valuations and Stock Price Changes ........................................................................................................................................16
Appendix I: Company Profiles * ..............................................................................................................................................18
Appendix II: Global Telematics Industry Overview..................................................................................................................36
Third Party Commentary Suggests Telematics will See Growth….......................................................................................36
…but There are Still Reasons to be Cautious on Near-Term Growth....................................................................................38
Complicated Ecosystem - Many Players, Many Technologies..............................................................................................38
Market Segments ..................................................................................................................................................................39
Disclaimers ...............................................................................................................................................................................40
Wellington West Capital Markets Stock Rating System ...........................................................................................................40