ThingMagic-Trimble Deal a “Desired Outcome,” and a Next Stage for RFID and GPS Technologies

10/26/10Follow @gthuang

Yesterday’s acquisition of Cambridge, MA, technology firm ThingMagic by Silicon Valley-based Trimble (NASDAQ: TRMB) left a lot of people in the radio frequency identification (RFID) and location-based tech sectors wanting to know more. I spoke with both companies late in the day to get some answers.

Overall it sounds like a fairly standard acquisition that allows ThingMagic to continue its RFID operations and business under new ownership. “We decided it was best to acquire the assets from ThingMagic—the people and the team, experience, and the [intellectual property], name, and branding. All [employees] are invited to come on over,” says Jurgen Kliem, vice president of Trimble’s strategy and business development.

ThingMagic is now a 33-person division of Trimble, which has some 3,800 employees in 23 countries (it already had a small software group in Waltham, MA). The ThingMagic offices in Cambridge and Woburn will remain, and employees will be staying put for now. That seems important, since the company is one of the stalwarts of Kendall Square and the local tech startup scene, having been founded in 2000.

“The benefit and opportunity, from my perspective, is enormous,” says Tom Grant, ThingMagic’s chairman and CEO, and now a general manager at Trimble. “We’re beginning to see substantial growth in RFID…and need to make sure we continue to fuel that growth.” Trimble represents a “shot in the arm,” he says, in that ThingMagic now gains the financial support of a billion-dollar company. Grant will lead a division that “lets us continue with our global market strategy,” he says.

The deal represents an exit for ThingMagic’s venture investors, which have included (all in the past five years) Tudor Ventures, The Exxel Group, Cisco Systems, Morningside Technology Ventures, and In-Q-Tel. The companies did not disclose the size of the acquisition, so it’s hard to tell how well the investors made out. (Word on the street is that ThingMagic raised more than $30 million, and—this is pure speculation based on what I’ve heard from sources outside the companies—the acquisition is for less than $55 million.)

“To our investors, this was a desired outcome. They wanted this and we accommodated it,” Grant says.

It’s not totally clear how Trimble plans to integrate RFID into its asset-tracking and global positioning technologies and products. Kliem says that RFID “will play a big role, integrated in our offerings.” In fact, Trimble has worked with ThingMagic since 2008, Kliem says. From what I gather, one of Trimble’s big applications is to help telecom companies like AT&T or Comcast track and position their service fleets so the right crew goes to the right place to help customers with problems. RFID technology can help workers in the field keep track of their tools and equipment in their vans or trucks (much like ThingMagic’s partnership with Ford). So look for more ways that RFID could get integrated into global positioning systems, or provide complementary services.

From ThingMagic’s perspective, combining RFID with Wi-Fi, GPS, and other location-based technologies is all consistent with its vision of an “Internet of things,” where people can get information about real-world objects around them in their office, home, car, or on the street. That’s what the company’s founders (MIT Media Lab alums including chief technology officer Yael Maguire and head of product development Ravi Pappu) have been talking about since the early 2000s. Speaking of which, what will the founders do next—will they stay with Trimble, at least for a while?

“Their futures depend on their choices,” Grant says. “At this point, their roles will continue as they are. There will be more announcements on that in the next few days.”

I asked Grant for some more perspective on what the deal means for the future of ThingMagic and RFID technology. “It’s been a great year. We want to build on that,” Grant says. “We want to have the mindset of continuing to invest in R&D and continuing to drive into other markets. We need to make sure we have the resources to go after it. I like to say we brought a billion-dollar company into the RFID industry.”

“This is a key inflection point for us as a company, and as an industry,” he says. “This is the best place for us to move to the next stage.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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