Navman sells out to NYSE-listed giant Brunswick for $56m

By PETER GRIFFIN IT writer

A 70 per cent chunk of Auckland tech darling Navman has been snapped up by a huge US manufacturer for $56.1 million, but the company vows it will not disappear overseas.

A designer of digital navigation equipment, Navman has annual revenue approaching $100 million from selling its global positioning systems in the United States and Europe.

The company is being sold to Brunswick Corporation, a New York Stock Exchange-listed manufacturer of marine engines and outdoor equipment with annual revenue of US$3.7 billion ($6.3 billion).

Brunswick largely pays cash for the stake, also taking onboard $1.5 million in debt. It is buying out Navman shareholders including private equity investor Capricorn Holdings and venture capitalist Emerald Capital, leaving founder Peter Maire, his managers and those in the company's share scheme, with 30 per cent. Brunswick has an option to take full ownership by the end of 2005.

For Emerald Capital investment manager and Navman chairman, Andrew Clement, the sale is a disappointment, "We agreed to sell into the Brunswick offer simply because they wanted to get total control. Sadly from my point of view, we are exiting."

According to Navman's latest annual return, Capricorn owned 23.3 per cent of Navman and Emerald about 18 per cent.

Clement said Emerald had wanted to invest in the company for the long term. "In our overseas company we've owned things for over 40 years. We made an OK return but it was too short a time frame".

Capricorn Holdings director Walter Kettelwell refused to comment.

Navman will form the nucleus of Brunswick New Technologies, a unit developing marine electronics and software.

Navman's statement said it would continue to expand its manufacturing locally, and it had signed a deal to double its Auckland factory space. The company employs 350 staff and plans to increase that number by 25 per cent next year.

The sale is a surprising move for Maire who was proud of the fact Navman was able to buy out its US shareholder at the end of 2001, bringing the company back to 100 per cent New Zealand ownership.

Navman went on to buy the GPS division of Nasdaq-listed semiconductor maker Conexant.

"We've been able to do things in reverse: dump the manufacturer relationships, take over the brand and distribution strategies ourselves, buy our shares back from the US shareholder - and then buy a US company," he said last year.

Navman has won several Government grants, the last of which was for nearly $1 million awarded in 2001.

Back then Maire said he was motivated by "the thrill of exporting, not the money".

Navman's export sales since then have surged. In May it won a contract to supply electronic devices for collecting road tolls in Germany that is worth $40 million over the next two years.

But the sale to Brunswick highlights a familiar trend among New Zealand's most successful IT companies - they get plucked up by overseas investors.

Just last month 40 per cent of 3D sports animation company Virtual Spectator went to Bermuda-based Investors Guaranty Fund for about $3 million.

In December email security company Marshal Software sold to US investors for $45 million. In 1998 Binary Research's cutting-edge Ghost software was sold to Symantec for about $50 million.

Clement said Brunswick's market reach was too good to pass by.

"There would have been capital there to do things but the access to the American market, access to the boating market, their knowledge of the boating industry, there was nothing to match that."

Peter Maire was unavailable for comment.