3i positions Nordnav for further growth

3i has completed the successful sale of Nordnav, a leading provider of global navigation satellite system software. The company has been sold to former 3i portfolio company Cambridge Silicon Radio in a deal worth €58m.

An expert in GPS software
Founded in 2002 by two researchers from Luleå University of Technology and Stanford University, Nordnav is a market leader in the software GNSS receiver market, providing the only genuinely working Global Positioning Satellite (GPS) software solution for mobile devices. Nordnav develops and licences software receivers for GPS and Galileo that offer both better performance and significant cost savings compared with  alternatives. The company’s solutions enable high quality location functionality to be built into any portable device, including mobile phones, PDAs and automotive navigation systems.

A great track record in Nordnav’s market
3i was initially introduced to the business in mid-2004 by Mattias Åström, who was to become Nordnav’s CEO, and co-investors smac partners. Nordnav’s management team was keen to secure investment from 3i so it could take advantage of the company’s international network. It was also impressed by 3i’s track record in the handset software market – Nordnav’s partners at the time included 3i portfolio companies SiGe and Fractus. Kimmo Korpela, 3i Director, explains: “This is a business whose customers are all over the world. They have clients in the US, Japan, Asia and Europe. They came into the deal with the expectation that we would introduce them to potential partners and customers. The fact that we had invested in a company of the calibre of SiGe gave them the confidence that we would be the right partner for them.”

Close involvement in strategic decisions
During the year and a half that 3i was involved with Nordnav, it put the business in contact with a range of companies including Cambridge Silicon Radio, NTT DoCoMo,France Telecom, Nokia and Cambridge Positioning Systems. It also introduced Nordnav to Intralink, an Asian business relationship consultancy, and took an active role in board meetings. Korpela says: “We were involved in all the major strategic discussions. For example, we discussed whether it made sense to roll-out a technology to serve the personal navigation device (PND) market. We agreed that pursuing the fast moving PND market in the short-term would make more sense than focusing on the automotive market with long development cycles.”

3i was also instrumental in arranging the trade sale. CSR was a former 3i portfolio company and Korpela could see an obvious match between the company’s Bluetooth technology and Nordnav’s GPS software. Once the two companies had been introduced, negotiations moved swiftly and CSR tabled an offer for Nordnav in December 2006. During the process, 3i kept in regular contact with CSR’s CEO, which helped cement the deal. Korpela says: “This transaction has very clear logic in the industry and is a good outcome for Nordnav and its shareholders. We, at 3i, are especially delighted to have demonstrated our value by introducing Nordnav to CSR, a highly successful company and originally a 3i investment.”

Mattias Åström, Nordnav’s CEO, said: “3i put us in touch with lots of companies in thesector and played a key role in developing the business internationally. The sale to CSR was a great result for all of the parties involved.”