March 26, 2007
Pitney Bowes to Acquire MapInfo
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Susan Smith - Managing Editor


by Susan Smith - Managing Editor
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Welcome to GISWeekly! Pitney Bowes Inc. announced this week that it has entered into a merger agreement to

acquire MapInfo Corporation for approximately $408 million in cash, net of expected cash on MapInfo’s balance sheet at the time of closing. Read about it in this week’s Industry News.


GISWeekly examines select top news each week, picks out worthwhile reading from around the web, and special interest items you might not find elsewhere. This issue will feature Industry News, Top News of the Week,
Acquisitions/Alliances/Agreements, Announcements, Contests, New Products, Around the Web and Events Calendar.


GISWeekly welcomes letters and feedback from readers, so let us know what you think. Send your comments to me at giscafe-editor@IBSystems.com


Best wishes,

Susan Smith, Managing Editor


Industry News

Pitney Bowes to Acquire MapInfo

by Susan Smith


Pitney Bowes Inc. announced this week that it has entered into a merger agreement to
acquire MapInfo Corporation for approximately $408 million in cash, net of expected cash on MapInfo’s balance sheet at the time of closing. MapInfo is a leading global provider of location intelligence solutions and will be the largest acquisition Pitney Bowes has ever made. In the next seven business days, Pitney Bowes will commence a tender offer at a price of $20.25 per share in cash for the outstanding common shares of MapInfo. Shareholders will get
approximately 50% premium over the closing stock price of the day before (closed at $13.21/share) the offer was made, a very good deal for them. GISWeekly spoke with both Steve Walden, VP and GM of Business Geographics for Pitney Bowes Group 1 Software and Michael Hickey, CEO of MapInfo, headquartered in Troy, New York about the agreement and their thoughts on what is coming up. The Group 1 software arm of Pitney Bowes is in Boulder, Colorado. Walden was one of the executives of Pitney Bowes who was instrumental in putting together the acquisition of MapInfo.


Steve Walden, VP and GM of Business Geographics for Pitney Bowes Group 1 Software


GISWeekly: Pitney Bowes is familiar to me, and to perhaps many of our GISWeekly readers, as the company that creates stamp metering machines. It’s clear that with the purchase of Group 1 some years ago, that it has expanded its horizons considerably. Can you tell us about the company’s history and direction?


Steve Walden:
When Group 1 was acquired (I was part of Group 1), three or four years ago I had the same reaction about Pitney Bowes being a stamp metering company. Pitney Bowes got started with its postage meters. It took an act of Congress to allow Pitney Bowes to be in business almost 87 years ago, because in essence we’re printing currency with the metered postage. The postage meter makes a lot of people’s lives a lot easer than licking and affixing a stamp to everything that goes out the door. There’s equipment that folds and inserts at the tabletop level, then at the large end, there are machines capable of 18,000 pieces of mail an hour going through one of
our inserting machines.


We have about 2 million customers worldwide. We’ve garnered substantial marketshare over the years, so growth becomes more challenging in those kinds of environments. The company is looking at going both upstream and downstream from the core of the business. If you imagine, after the mail is already in an envelope, where can you go? We bought a company called PSI, which is a presort company, which takes medium volume mailers that wouldn’t ordinarily get much postal savings and used physical sortation equipment to take mailings from a lot of different people, to build enough density in a given zip code to get postage discounts which are then shared with our customers.


Group 1 is also in the business of cleaning up the addresses that make it onto the outside of the envelope as well as onto the pieces of correspondence. The geocoding and geospatial capabilities came along as part of Group 1 and were a piece of what led up to this acquisition of MapInfo.


But we’ve also been buying other companies that are outside the core as well. We’ve driven revenues up in absolute dollars in the core business, but as a percentage of Pitney Bowes’s overall business it’s now dropped to somewhere close to 50% of the overall $5.7 billion revenue of the company. Thus the company’s much more diversified outside of its core than ever before. A new ad campaign cites, “What will we put our stamp on next?” We are trying to change people’s perspective from Pitney Bowes, the mailing machine company to Pitney Bowes, the global technology company.


GISWeekly: Having gone through numerous acquisitions yourself, what do you perceive as the future of MapInfo once it becomes acquired by Pitney Bowes?


Steve Walden:
My perspective is we made the decision to purchase MapInfo because we believe they’ve got the right strategy and right management team. I don’t really see that changing as a result of a being part of Pitney Bowes. There might be some additional things that might get added. Pitney Bowes is obviously very strong financially and will put the kinds of resources behind this that are required to become the winner in the marketplace. It’s not like MapInfo was struggling, they were doing quite well, and a lot of credit goes to the management team for getting the company to this point. I wouldn’t expect to see a radical departure from the course
it’s on.


From a reporting structure, MapInfo, like Group 1, will report up to Pitney Bowes’ document messaging technologies business unit, which is about a $1 billion piece of Pitney Bowes.


GISWeekly: How does Group 1’s product offering coordinate or interoperate with what MapInfo offers?


Steve Walden:
We’re going to be figuring all that out post close. We have within this group produced products that are highly embeddable within other processes. We have interoperability in terms of being able to import and export MapInfo files in our format and when we geocode something, it’s coming back with latitude and longitude. A lot of our customers today are joint customers with MapInfo, and, if we jointly decide to go down this path we can make them very tightly coupled.


GISWeekly: Do you have some products in common?


Steve Walden:
There is a small amount of overlap between the products, we both have U.S. geocoding technology, Canadian geocoding technology and UK geocoding technology, but outside that is where the overlap stops. In terms of what does that mean, we’ve got history on both sides, one where we do pick a technology that we want to standardize on for everybody and move in that direction. We’ve got plenty of history of many customers on disparate platforms, and both of those stay alive forever. The biggest example of this is when Pitney Bowes bought Group 1, Pitney Bowes had an address standardization engine called Finalists and Group 1 had one called Code 1 Plus. They both
lived, and there are no plans to sunset either product.


The customer upheaval is believed to be too high and not worth the cost savings that might be derived by changing to one platform or product.


GISWeekly
: Do you expect the acquisition to go pretty much the same as the Group 1 acquisition?


Steve Walden: I expect so. With Group 1, Pitney Bowes kept the name brand and management team around, and everything intact running down its own path and tried to build bridges between different pieces of Pitney Bowes to make sure we’re able to leverage each other in the most effective ways. Group 1 has a strategy and a number to hit, and goes about its business just like the other independent parts of Pitney Bowes. MapInfo will maintain their annual conferences, etc.


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