Pitney Bowes/MapInfo - Take #2
Having spoken today with both Mike Hickey, COO of MapInfo, and Steve Walden, Vice President and General Manager of Pitney Bowes’ Group 1 Division (G1) we can assert that both companies feel like the acquisition that was announced yesterday was good move. And from my perspective, the aquisition is certainly complimentary. It’s a good move by G1 and MapInfo will be able to address some growth opportunities that it might not have been able to do without the help of a larger, parent company.
From MapInfo’s perspective, Hickey said that the company had been approached by as many as seven firms to acquire them. It was the fiduciary responsibility of the board of directors to take the offers to the shareholders. At the 50% premium over the existing stock price, Pitney Bowes "showed MI the money" and it was an offer that was hard to refuse. As a stockholder until yesterday, I would have been furious if they had turned it down. But MapInfo was also feeling some of the pressures of Wall Street to constantly show progressively positive returns and was also somewhat contrained by the accounting procedures forced upon public companies by Sarbanes-Oxley. This acquisition would now provide them with some breathing room to pursue other opportunities that they might have felt was not prudent otherwise.
From Pitney Bowes’ (PBI) perspective, it brings to them a company that provides a deeper reach into the business solutions value chain that they did not have previously. PBI is in the business of customer communciations management so the MapInfo acquisition takes them more into the realm of target marketing. If you weed through the marketing lingo, this provides a more complete market intelligence package for a client looking for direct marketing campaign management.
My question is whether this is too much of a stretch for PBI. Indeed it is complimentary but it seems like a large step for a company that is really into mailstream management. Walden said G1 had not tried to offer a visualization platform like MapInfo’s and perhaps thought customers might have benefited if they had. The move by Pitney Bowes to acquire G1’s address validation and geocoding solutions in 2004 did not seem like a stretch. The MapInfo acquisition, PBI’s largest ever, seems like a leap further down the value chain. But only time will tell and the details of how the management teams will meld is yet to be determined. From Hickey’s point of view, the MapInfo management team was along for the ride while the shareholders and BOD determined how best to evaluate the opporunities presented to them. It may be a wild ride or smooth sailing…we’ll keep watching.
