NEW YORK-MapInfo Corp., Troy, N.Y., agreed to acquire On Target Mapping, a Pittsburgh, Pa., provider of mapping data solutions for telecommunications companies, including AT&T Corp., Cable & Wireless plc, MCI WorldCom and Sprint Corp.
On Target Mapping will add telecommunications expertise to complement the business mapping solutions and spatial information management systems MapInfo provides to a wide cross-section of industries worldwide, said Michael Hickey, group vice president and general manager of MapInfo’s information business.
“By combining On Target’s products with MapInfo’s broad distribution and product development capabilities, we believe that major telecommunications providers which previously developed their own data will increasingly turn to MapInfo’s expanded suite of products and solutions,” he said.
Under terms of the agreement, MapInfo will pay $2.5 million cash to purchase On Target Mapping. For the 12-month period that ended Sept. 30, On Target had net revenues of $2.3 million.
MapInfo also may make additional “earn-out” payments through 2000 based on On Target’s contribution to MapInfo’s business, Hickey said. “For companies with a lot of products in the pipeline,” earn-out payments based on meeting future performance criteria are a common alternative to benchmarking an acquisition’s worth in terms of cash-flow multiples, he said. MapInfo said it expects the On Target purchase will be nondilutive to earnings in Fiscal 1999 and accretive to earnings in Fiscal 2000.
