LAS VEGAS – The unveiling of the combination of Trimble’s telematics business and venture capital-backed Platform Science in parallel with Trimble’s annual customer meeting in Las Vegas wasn’t coincidence. It was sort of the point.
The transaction was announced Sunday, the first day of events tied to Insight. The Trimble technology conference brings in thousands of representatives from its customers, particularly from carriers.
“We oriented so much of our work these last weeks and months to get to this moment,” Trimble CEO Rob Painter said of the announcement’s timing. Painter made his remarks at a media briefing following the opening session of Insight.
Under the transaction, whose projected closing date has not been revealed, the telematics segment of Trimble’s Transportation Group will be merged with that of Platform Science. In exchange, Trimble will now own 32.5% of the company. Trimble (NASDAQ: TRMB) also will have a seat on the Platform Science board.
“This isn’t a passive transaction,” Painter said at the briefing. “If it was purely transactional, we could have done a cash deal or completely walked away. And that’s the exact opposite of what we did.”
Painter said the transaction will be better for the Trimble telematics business in combination with Platform Science because “I think it becomes a more focused business. I think it will operate at a higher level of scale.” He noted more than once that he expects the combined telematics businesses will provide a better route to further investments in technology.
A “pure play” company
As with any VC-backed company, there is always the question of when the investors will “exit” – VC-speak for selling their stake. “If it’s good for customers, then I think it’s good ultimately for us,” Painter said. Trimble’s telematics business will now be part of a pure-play telematics company that Painter said is more likely to receive a “capital markets reward” and “will be better served under Platform Science having majority ownership.”
And if the company garners a rich valuation in the markets – though Painter didn’t say it – about a third of the sales price will be property of Trimble.
Other investors in Platform Science are truckload carriers Schneider (NASDAQ: SNDR) and C.R. England, engine builder Cummins (NYSE: CMI), truck builders Daimler Truck North America and Paccar (NASDAQ: PCAR), warehouse operator Prologis (NYSE: PLD), and RyderVentures, the venture capital arm of Ryder Enterprises (NYSE: R). Other owners include private capital companies 8VC, Activant Capital, BDT & MSD Partners, Softbank, and NewRoad Capital Partners.
Skin in the game
Asked about not just taking cash in any deal, Painter said, “I want us to have skin in the game.”
“We’ll have a board seat on the combined company, and that’s because I believe in Jack and I believe in their team,” Painter said.
Painter and Platform Science founder and CEO Jack Kennedy said they did not have an updated number on the valuation of Platform Science following the transaction. But Kennedy added that the other investors in the company supported the deal with Trimble despite a dilution of their holdings.
A February 2022 capital raise led to a valuation of $575 million. A capital raise in April did not disclose a new valuation for Platform Science.
Without a cash infusion, the question was asked of Kennedy: What do you get from this deal?
He ticked off several capabilities that come with the Trimble telematics business.
“We have a great customer base but the global scale, the segments they bring to us in certain product categories, they’ve additive, so they give us that speed,” Kennedy said.
One of the strengths of the Platform Science telematics product offering, which is named Virtual Vehicle, has been that it is a product that rolls off the assembly line at OEMs after being installed in trucks. When Virtual Vehicle was launched in 2021, Daimler Truck North America described it as “the first open OEM platform that enables fleets to access telematics, software solutions, real-time vehicle data, and third-party applications directly from their vehicles.” Other telematics systems were – and continue to be – features that are added to a vehicle after it goes into the market.
“Virtual Vehicle represents a platform-first approach that provides customers greater value and a significantly expanded choice of software-enabled services,” Daimler Truck said at the time.
Other Trimble transportation offerings not affected
Painter stressed that the only operations in the company’s extensive transportation business affected by the transaction with Platform Science is the Transportation Management segment, the formal name of its telematics offerings. On its website for that segment at Trimble, the company lists the other units in Transportation as Enterprise, Maps, Vusion and Transporeon.
The Transporeon acquisition, announced in late 2022, was completed in 2023 at a price of 1.88 billion euros ($2.1 billion at current conversation rates). It is a global, cloud-based TMS. Vusion is a fuel tax compliance system.
The Platform Science/Trimble deal has many details to be worked out. For example, asked if a Trimble salesperson who now sells telematics products for that company would be selling under the Platform Science name, Kennedy said, “I can’t leap ahead to the future.”
“I can assure the market we won’t do anything that is abrupt and is confusing to the market,” Painter said in response to the same question. The “conversation” will include issues such as branding, and how will the two companies “provide the runway to get to a vision that’s going to make sense?”
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