Buying a business: Nordnav GPS software business

Acuity Advisors helped a Cambridge-based technology company who were interested in buying a business to strengthen their GPS capability

This is how we did it…

The opportunity

Cambridge Silicon Radio (CSR) is a global leader in Bluetooth technology and had serious ambitions which included buying a business to expand and extend its reach by adding GPS functionality to its Bluetooth semiconductor product range. Acuity Advisors successfully managed a major acquisition on behalf of CSR to help it achieve its GPS objectives.

The business

Based in Cambridge, CSR is a renowned and respected provider of multifunctional connectivity and audio platforms. Its technology portfolio includes Bluetooth, GNSS, FM, Wi-Fi (IEEE802.11), UWB and NFC. These and other technologies enable platforms that incorporate fully integrated radio, signal processing and microcontroller elements along with appropriate algorithms and software. CSR has enjoyed huge success and its Bluetooth offering has become the clear market leader in a multi-billion dollar market.

CSR’s technology has been adopted by market leaders into a wide range of mobile consumer devices such as phones, vehicle navigation and telematics systems, portable navigation devices (PNDs), wireless headsets, mobile computers, mobile internet devices, recreational devices, digital cameras and mobile gaming. CSR’s customers include industry giants such as Apple, Dell, LG, Motorola, NEC, Nokia, Panasonic, RIM, Samsung, Sharp, Sony, TomTom and Toshiba.

The need

CSR’s challenge of diversifying and extending its technological offering was not one to be taken lightly. It had no in-house corporate finance team to oversee a suitable acquisition and needed experts on board who could broker the right deal on their behalf. So CSR had to:

• Locate a corporate team who could provide support in buying a business:

CSR wanted to find experts who could effectively act as its own in-house team and who could integrate and work within its corporate environment.

• Source the right type of acquisition:

CSR also had to locate corporate advisors with an impressive track record in its sector, the right contacts and a proactive approach to secure the best approach to buying a business

CSR knew it had to recruit a team who could understand the rationale behind any acquisition, rather than simply oversee a transaction. It quickly became clear that Acuity’s unique blend of experience and skills was exactly the right fit for the needs of CSR. Acuity’s experience in wireless and semiconductor technology and ability to work seamlessly with the CSR management team were crucial factors in CSR’s decision to hire them to broker the best deal on its behalf.

The approach to buying a business

Acuity set out to source the best possible acquisition for CSR. It was concluded that a software-orientated solution would be the best fit for CSR’s existing customer base and the emerging mobile phone market. Acuity examined and analysed the existing market, patents and technology and also profiled prospective targets before proactively approaching them.

Acuity pinpointed a short list of organisations that provided software GPS solutions and devised a comprehensive board paper outlining its business case and financial model. An initial approach to Swedish GPS start-up NordNav Technologies was made and detailed negotiations commenced. Acuity also project-managed due diligence and all legal, financial and technical issues.

The result

After a five-month process, Acuity helped CSR acquire NordNav for $75 million. Legal teams in London and Sweden ensured that all interests were carefully managed, including multiple venture capital investors behind NordNav including 3i Group plc, InnovationsKapital and smac partners.

John Scarisbrick, CEO of CSR, said: “We are delighted with this acquisition. We will be able to provide a technically superior GPS solution, which at less than $1 allows GPS to be affordable to all. CSR’s customers are enthusiastic for GPS at this much lower price point and I am confident that we will see a significant increase in mobile handset attach rates for GPS and location-based services. Our focus remains on the handset market and we are executing on our strategy to add value beyond Bluetooth in the phone. We will continue to invest both organically and via complementary acquisitions to further improve our product offering, enhance our customer proposition and maintain our competitive advantage.”

And Christopher Edwards, Legal Counsel, Cambridge Silicon Radio, added: “Acuity played a pivotal role in the acquisition of NordNav by CSR. I have no hesitation recommending them for a mid-market transaction. Acuity displayed the key requirements for any transaction; sector understanding, network and the gritty determination to get the deal done.”

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