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MapInfo Buys Thompson Associates, Shows a Loss for Q1 2002

An Analysis

Adena Schutzberg

Editor, GIS Monitor

Janauary 7, 2003

MapInfo started the new year with the acquisition of Thompson Associates, based in Ann Arbor, Michigan. Thompson is best known as a retail business intelligence service provider, but the company also has a software division, AnySite, that has been a MapInfo reseller for more than a decade. The purchase is valued at $13 million and may include up to $6 million in payments over the next two years, depending on the profitability of the new division under MapInfo. MapInfo expects the acquisition to pull in $13 million in revenue or about one to two cents per share revenue in fiscal 2003.

Thompson has a number of Fortune 1000 customers, including Home Depot, AT&T;, and Jo-Ann Fabrics along with a fleet of supermarkets and restaurants. The company will join MapInfo's Analytical Customer Relationship Management (aCRM) business unit under the direction of Kevin Antram. With the 93 people from Thompson Associates, MapInfo now has 773 employees, a spokeswoman told the Associated Press.

Mark Cattini, MapInfo President and CEO, was straightforward about the acquisition, noting that the acquisition "further reduces its [MapInfo's] exposure to the communications industry. We plan to grow by extending Thompson Associates' analytical service expertise to vertical markets where MapInfo has an established presence and leveraging Thompson's client base for additional sales of MapInfo's products and services."

This is a move away from products and toward services. That's important since MapInfo, historically, has been a product-driven company mostly selling software and data. Location-based services, should they play out for the company, and the new business brought in from Thompson, should continue the shift toward services.

Directions Magazine reports that while the president of Thompson and other senior executives will stay on at MapInfo, layoffs have already occurred at Thompson and within AnySite.

Even as the acquisition press release was making the rounds, so was a second one announcing that MapInfo was expecting to report revenues of between $20.5 million and $21.0 million and a loss per share between $0.11 and $0.13 for the first fiscal quarter of 2003, ended December 31, 2002. Analysts had expected a one-cent per share loss. Cattini put it this way, "Business conditions in the Americas [are] the most challenging I have seen in my more than seven years at MapInfo." The company will announce final earnings on January 21 and at that time will provide "an update on our growth initiatives in aCRM and LBS." My guess at this point is that aCRM will be a target growth area and LBS may be scaled back.


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