Finnish company takes over Estonian mobile positioning system developer

  • 2000-10-05
  • Kairi Kurm
TALLINN - Finnish e-business solutions provider Digital Open Network Environment Corporation (Done) on Sept. 22 acquired, Regio, one of the most innovative companies in Estonia.

Regio is one of the world's leading suppliers of positioning systems for mobile networks. According to the founders of Regio, the merger will enable improved marketing for the company's product among the telecommunications giants.

The acquisition was executed through an exchange of shares, through which Done issued 789,285 new shares to the sellers of Regio in a direct issue.

Regio belonged to three Estonian private citizens, who established the company in 1990, as well as to American venture capital fund Baltic Small Equity Fund, which joined in 1998. Now the former owners of Regio have about 3 percent of Done's share capital.

"We were looking for an investor in order to develop our competence in mobile positioning," said Teet Jagomagi, chairman at Regio. "Done Wireless was looking for personalization and positioning services for WAP portals. They had already found a company that offered personalization services, and we accommodated them as a company to provide positioning services. Done, on the other hand, fit us as a company with an international network, enabling us to expand abroad."

Kalle Heikkinen, Done board member, said that Regio complimented Done's growth strategies, primarily in the business areas of wireless and information logistics.

"After the initial discussions both Regio and Done found that we will be stronger together. We plan to have several joint projects. Otherwise the companies continue as they are today," said Heikkinen.

Regio will become a center for developing mobile positioning systems for Done and for this reason the company will be hiring 20 specialists for its Tartu office.

Regio, which initially started with map and navigation systems and systems integration, currently has 48 employees in Estonia.

"The cooperation will help us in selling our traditional products as well as to compete with our biggest competitors, who are six to nine months behind us in their technical developments," said Jagomagi.

The main product of Regio is Enhanced Mobile Positioning Center, one of the most advanced positioning systems for GSM networks available. A positioning service of rescue calls, Rescue Board, is in testing phase in Estonia. Ericsson is one of Regio's distribution partners.

Regio's turnover for 1999 was 18.7 million kroons ($1 million) and its operating profit was 1.4 million kroons. For the year 2000, Jagomagi predicts a 22 million kroon turnover and a 2 million kroon profit.

Done's consolidated turnover for 2000 is expected to reach a minimum of 60 million euros (936 million kroons). Done's shares are also listed on the Helsinki Stock Exchange.

Done is a rapidly growing provider of comprehensive e-business solutions in both network and wireless environment.

Done's strategic focus areas in wireless communication are mobile commerce solutions and applications and mobile software platforms for integrating personalization and positioning services.

With the acquisition of Regio, Done has 1,052 employees, 339 of which are located outside Finland, in the United States, Estonia, Great Britain, Sweden, Slovakia and Hungary.

Heikkinen said that Regio's skill base would help the company in focusing on the global markets and he also confessed that as a stand-alone company it would have been more difficult for Regio to grow.

Jagomagi agreed that the cooperation enables the small Estonian company to reach big clients much faster.