TomTom navigates way to a takeover of Applied Generics

AN Edinburgh software company whose technology calculates traffic congestion by reading the signals beamed out by mobile phones has been snapped up by the Dutch satellite navigation specialist TomTom.

Applied Generics, which was founded just seven years ago and currently employs 18 staff, said it would benefit from being part of a much larger group.

Although the value of the deal has not been disclosed, Applied co-founder Ian Atkinson described it as a "key acquisition" in a rapidly expanding part of the technology market.

Satellite navigation has become one of the fastest growing areas of the car accessory market. Prices for dashboard-mounted units have tumbled from more than 1000 to under 300, making them one of the best-selling gifts this Christmas.

TomTom, with its range of popular Go route finders, is one of the biggest names in the portable satnav sector. Major industry players are now looking at ways of integrating live data on traffic conditions into their products.

Applied's technology can provide traffic information on an entire road network, including both national and secondary roads, unlike rival systems which merely cover national routes.

A subscription-based service also allows road managers to access traffic information 24 hours a day.

Mr Atkinson said: "TomTom is looking to expand what it does. This is very much about buying us for the technology and for the ongoing business - the staff here will be remaining with the company. With the additional resources of TomTom behind us, we can operate much better than as a small company on our own."

Dr Joe Dixon, another co-founder of Applied Generics and the company's managing director, added: "With the large customer base and rapidly growing number of car navigation products as well as the financial and distribution strength of the TomTom group, we are now in a unique position to commercialise our technology much more widely. Our existing customers and partners will benefit from Applied Generics being part of TomTom."

Applied, which is based at the Pentlands Science Park just south of the city, posted a small net loss last year on revenues of around 700,000. Under TomTom's ownership, the name is likely to stay "for the foreseeable future".

TomTom chief executive Harold Goddijn said: "We are very pleased that we have acquired Applied Generics.

"The unique patented and proven technology which the company has developed will deliver high-quality real-time traffic information, not only for motorways but also for local roads. We are looking forward to working with mobile network operators across Europe and North America to deploy the technology."

The Dutch firm, whose flotation last May was the biggest on the Amsterdam stock exchange in five years, has seen its revenues soar while managing to maintain stable operating margins.

THE FACTS

Signalling their intent: Applied Generics is based at Pentlands Science Park to the south of Edinburgh.

The firm was founded in 1999 by Dr Joe Dixon, Ian Atkinson and Bruce Adam.

In 2001, it secured funding to strengthen its commercial and engineering teams.

Live testing in Sweden demonstrated the effectiveness of Applied's technology in determining road traffic information from the monitoring of signalling data in the mobile phone network.

Through its partner network, the city firm has successfully completed installations across four continents.

Driving force: TomTom is one the leading names in the fast-expanding satellite navigation market, where it competes with the likes of Garmin, Navman and Mio. The company was founded in 1991 in Amsterdam, and its navigation products, left, are now used by more than one million customers across 16 countries.