Pitney Bowes Buying MapInfo

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Document and mail management vendor Pitney Bowes Inc. said Thursday it plans to acquire MapInfo Corp., a provider of location intelligence software and services, for about US$408 million in cash.

Pitney Bowes plans to use the purchase to expand its location intelligence business, which developed nearly three years ago with its acquisition of Group1 Software, said Matt Broder, a spokesman for the company, which is based in Stamford, Connecticut. The segment is a natural extension of the software, services and hardware Pitney Bowes already offers to manage mail and documents, he said.

"You can build different value chains -- one is around the mailstream and documents -- knowing the physical location of an address," he said. "That's what MapInfo has done a great job at exploiting, and we think it has tremendous potential to grow [at Pitney Bowes] in a major way."

In the next seven business days, Pitney Bowes will begin a tender offer at $20.25 per share in cash for the outstanding common shares of MapInfo, the company said. Pitney Bowes expects the deal, pending regulatory approvals, to close in the second quarter.

MapInfo, in Troy, New York, provides software and services to help companies analyze various business assets and other data and their relationships to geography in an effort to make business decisions. For example, banks use MapInfo's products to decide the best places to put automated teller machines, while retail outlets use the vendor's offerings to decide where to open new stores. Eighty percent of business data used in key decision-making contains a location component, according to MapInfo, and the company helps businesses tap into this information.

MapInfo earned $165 million in revenue in fiscal year 2006, and more than 7,000 organizations worldwide use its products. In addition to its Troy office, the company has locations in the U.S., U.K., Canada, Europe, Australia and Asia.

Pitney Bowes expects the acquisition to reduce its earnings per share by $.04 in 2007. Within 18 months, however, the company can cut $10 million to $15 million from expenses by reducing administrative infrastructure and increasing its marketing leverage, it said.

Pitney Bowes, a $5.7 billion company, serves more than 2 million businesses in 30 countries.

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