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Technology Stocks : Trimble Navigation -- Ignore unavailable to you. Want to Upgrade?

To: SKIP PAUL who wrote (1909)	12/3/1997 10:33:00 PM
From: Step1	Read Replies (3) \| Respond to of 3506

Would like to hear your take on TRMB vs NGPSF I have been a lurker on this thread for a while and I really appreciate the intelligent messages and debates being posted . I cant claim any technical knowledge but I do my own research and proceed carefully using my common sense when buying stocks. I still have not finished gathering all the info I desire on the major players in GPS (perhaps never will, pretty sizable chunk of business and growing but would like to hear your views on competition between NoVatel and Trimble. How many products do they have that are competing head on and do you see them as potential merger candidates or rather head on competition. There is a Novatel thread but it is nowhere near as active as this one and I have seen some really knowledgeable comments here as well. looking forward to hearing your comments, sg

To: SKIP PAUL who wrote (1909)	12/4/1997 12:58:00 PM
From: Robert A. Sutherland	Read Replies (2) \| Respond to of 3506

Uh... no There is no mention of the overall valuation of the deal. But we should be able to generate a straw-man financial. Lets use Trimble as the model (~1.5:1 valuation-to-sales) Ashtech published %34 CAGR Q1 '97 with '96 sales of $49mm. If we assume they were able to maintain 25% for the first three quarters they had 12mos sales of $58mm. This gives a valuation of $87mm. With the $25mm cash outlay, this would equate the 34% holding to $62mm. So the overall valuation would be $182mm and the exisitng Magellan company would be valued at $95mm which translates back to $63mm 12mos sales. This assumes of course that Magellan convinced everyone that '97 was an anomaly and a 1.5:1 was justified. And of course everything scales with valuation-to-sales. Its also comlicated by the fact that Magellan had debt, but we don't know how much. Now for the why: Trimble went public in 1990 at $10/sh. Here we are in 1997 at ~$20/sh. NOT a stellar performance. Yet Trimble is the only company to have gone public with GPS. This should explain the smoke and mirror SiRF PR (i.e., it's not the market, its the cost) The fact is, the market is still in its infancy. All of the systems houses are feverishly looking to new applications as well as nurturing the existing ones to critical mass. The analysts are finally catching on to this, which is why Trimble has "entered a new rapid growth phase". The big markets are near. The Synergy between Ashtech and Magellan is great because they have very little technical overlap, but together rivals Trimble in several markets. Survey, GIS, time-transfer, handheld navigation, car navigation, precision farming, GPS-GLONASS technology, Airborne navigation (space-born navigation, maybe), INMARSAT terminals, ORBCOMM communicators, etc. Additionally, it appears that Ashtech has important IC expertise that Magellan is interested in. The combined entity is now sufficiently diversified to grow into those markets that grow fastest. Charlie was a big proponent of this because it provides long term corporate stability. Money? Well, Orbital has pretty deep pockets (dilution or debt). If Ashtech is profitable enough, maybe they can keep Magellan afloat without additional funds (unfortunately, my guess is this transaction bodes ill for those in non-profitable areas of both companies). Further mergers are possible (ala the merger fevor of the 60's). And of course there is the all-time favorite.. IPO.