Software behemoth Microsoft Corp. on Tuesday
announced that it agreed to acquire Vicinity Corp., a
Sunnyvale, Calif.-based innovator and integrator of location-based services,
in a cash transaction valued at approximately $96 million.
The key reason for Microsoft’s interest is Vicinitiy’s portfolio of
technology-based solutions that allow businesses and governments to find
available products and services in a specific area, which in turn let’s
Vicinity’s customers analyze and direct their own customers to a
brick-and-mortar store, branch or outlet near them that have the inventory.
A combined offering could be a huge leap forward for Microsoft’s
MSN MapPoint service amid its head-to-head competition with the
venerable MapQuest — at least in the area of software development and
integration. MapQuest is subsidiary of AOL Time Warner.
“Vicinity’s extensive experience in providing end-to-end solutions and
value-added services perfectly complements Microsoft’s MapPoint .NET XML Web
services platform,” said Ted Johnson, Corporate Vice President at Microsoft.
“This acquisition will accelerate the adoption of location-based technology
as a valuable ingredient of mainstream enterprise application development.”
The transaction is structured as a cash merger, in which Vicinity
shareholders will receive $3.33 in cash in exchange for each Vicinity
share — a healthy premium from its Tuesday close of $2.24.
The transaction is subject to approval by a majority of Vicinity
shareholders. Certain shareholders of Vicinity holding approximately 30
percent of the outstanding stock have already agreed to support the
transaction.
Consummation of the transaction is subject to customary closing
conditions, including Vicinity shareholder approval and approval of the
relevant antitrust authorities.
The transaction is expected to be completed before the end of first
quarter of 2003 and will result in Vicinity being merged with the MapPoint
Business Unit at Microsoft. Both Microsoft and Vicinity expect an
integration road map that helps assure customers, developers and third-party
vendors of uninterrupted services and a seamless transition.
Earlier this year, Vicinity rejected another takeover proposal from a private partnership that consisted of former employees called Moloco. That deal, which valued the company’s stock at $2.65, was rejected.