Morningstar | TomTom Reverse-Splits Shares, Distributes EUR 750 Million From Telematics Sale to Shareholders
As expected, TomTom completed its 16-to-9 consolidation of its shares May 23 as it is planning to distribute EUR 750 million of the EUR 910 million that it received from the sale of Telematics (to Bridgestone in April) to its shareholders in the form of a capital dividend May 27. The ex-dividend date will be May 23, with May 24 the date of record. After the capital repayment, our market cap valuation for TomTom will decline to approximately EUR 1 billion from EUR 1.8 billion. Our fair value estimate per share remains at EUR 8 as the share price decrease due to the capital payment will be offset by the reverse stock split. As no-moat TomTom shares continue to trade in 3-star territory, we recommend a wider margin of safety before investing.TomTom develops and sells of navigation and location-based solutions, which include among others, Portable Navigation Devices, sport watches, maps, traffic, navigation software and fleet management services. As of Dec 31 2014, Co. had four segments: Consumer business, which is focused on creating location-based products; Automotive business, which provides modular components, being maps, traffic and navigation software, to car manufacturers and head unit vendors; Licensing business, which sells TomTom map, traffic and navigation software as well as cloud-based products and platforms; and Telematics business, which provides fleet management solutions for commercial fleets of any size.
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