Navteq Continues To Rise On LBO Speculation

Includes: GRMN, NVT, SIRF
by: Tiernan Ray

The M&A parade continues. Shares of Navteq (NVT), which sells maps used in car navigation systems and on Web sites, are jumping for a second straight day on speculation the company may get bought.

Microsoft (NASDAQ:MSFT) and Google’s (NASDAQ:GOOG) discussion of mapping technology at a conference this week prompted speculation Wednesday that Google might perhaps want to buy the company, according to a report from American Technology Research analyst Robert Sanderson. Thursday, William Blair analyst Bill Benton commented that private equity could be interested in taking private the $4.2 billion market cap company.

Mapping is increasingly becoming an important element in mobile devices of various kinds, as is evident from the use of Google’s Google Maps program in Apple’s (NASDAQ:AAPL) forthcoming iPhone. The Bloomberg article on the matter quotes Benton as saying “A private equity owner could find interest in the business, given the duopoly structure of the market, growth potential, strong cash flow. It makes some sense for the company to be private, given the periods of instability in the pricing environment.'’ Benton was referring to Dutch company Tele Atlas NV [TLATF.PK], which is #2 in the mapping data market behind Navteq.

Shares of Navteq are up about 6% at $42.60, and were up as much as 11.4% Thursday after rising as much as 9.7% Wednesday. The shares are up 22% this year. Interestingly, not as much of a pop has been seen in other map-related companies, such as Garmin (NASDAQ:GRMN) and Sirf (SIRF), which focus more on software and hardware products than on mapping data.

Garmin has had a decent 17.6% rise this year, while Sirf Technology Holdings has fallen 14%. Garmin is up just under 1% Thursday at $65.49 while Sirf is up 1.29% at $21.95.

NVT vs. SIRF vs. GRMN 1-yr chart:
mapping chart

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