Private Equity Firms Backing Bids to Buy Nokia Maps


May 20, 2015

Nokia Oyj’s mapping business is being pursued by a number of companies and the bidding war has now intensified. Private equity firms have thrown their hats on the ring, as they are backing other companies in their efforts to snatch the mapping business. But who will prevail?


The Bidding Partners Emerge
The list of the bidders is starting to be quite impressive. According to a Bloomberg report, Uber Technologies is launching a partnership-bid with Baidu Technologies. People close to the deal have told the news agency that private equity firm Apax Partners is also involved in the partnership.


But the private equity-backed partnership isn’t the only consortium interested in the business. China’s Tencent Holdings and NavInfo Co. are also in the mix. They have teamed up with the Swedish buyout firm EQT Partners.


To make things more interesting, three US-based private equity firms have also told they are interested. Hellman & Friedman, Silver Lake Management and Thoma Bravo have been in talks with Nokia.


Nokia’s famous maps have also attracted interest from a group of German carmakers. Audi AG, BMW AG and Daimler AG are reportedly interested in the business.
Furthermore, Microsoft Corp, the company who bought the mobile phone unit a while ago, has said it is willing to buy a minority stake in the mapping business. But it isn’t sure how interested Nokia is in selling a minority stake – it is more likely the company will sell the whole business to a single bidder.


Focusing Efforts
For Nokia, the deal is part of its refocusing efforts. The Finnish company is considering a sale of the mapping unit and to focus solely on its mobile-network equipment and services.


Last month, the company bought Alcatel-Lucent SA in a deal worth €15.6 billion. The deal created the world’s biggest supplier of equipment to power mobile-phone networks.


The company is facing tough competition from China’s Huawei Technologies company and a sale could boost its market presence.


Bidding War Intensifies
The next round of bids is thought to take place within two weeks. According to experts, the bids for the mapping business could reach €3.5 billion. Sources close to the deal have said Uber and Baidu have so far offered around €2.6 billion for the Nokia unit.


The deal could be worth quite a bit, especially as so many private equity firms are involved. Private equity firms currently have a lot of capital to deploy and Nokia’s Here mapping business is seen as one of the success stories. It is the only real rival to Google Maps, with mapping services becoming increasingly important for smartphones and other connected devices.


For private equity firms with a technology focus, these mapping services are a hot investment opportunity. With the increase of smart technology in cars, watches and phones, mapping could be the next big thing.


So far, the parties in question have not provided any official comment on the reports. With the news of the price tag increasing day by day, Nokia will surely wish to keep the bidding going for a while.


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