Digital mapping company HERE to acquire ATS in connected-car play

LONDON (Reuters) - Digital mapping firm HERE said on Tuesday it plans to acquire Advanced Telematic Systems (ATS), a Germany-based company that provides “over the air” software updates for connected and autonomous vehicles.

The deal, whose terms were not disclosed and which should close in early 2018, would strengthen HERE’s position as a provider of location and cloud services for self-driving cars that could hit the road in large numbers within a few years.

“The acquisition of ATS is a hugely important strategic investment for us to complement our portfolio as a premium automotive cloud provider,” said Ralf Herrtwich, SVP Automotive of HERE Technologies.

HERE was itself sold to Nokia to Audi, BMW and Daimler in 2015 for more than $2 billion and functions as a research lab for the carmakers as they seek to counter the competitive threat from U.S. electric vehicle maker Tesla.

Its mapping technology competes with Alphabet’s Google Maps and Dutch rival TomTom.

HERE, the biggest provider of digital maps for the automotive industry, spent 640 million euros ($760 million) on research and development in 2016, or around 55 percent of its sales of 1.16 billion euros, according to documents reviewed by Reuters.

Over-the-air technology, or OTA, is in increasing demand as companies developing cars as digital devices and autonomous vehicles seek to keep their technology updated and user experience fresh.

It is similar to the way smartphones receive operating system and application updates over mobile networks, and has been pioneered by Tesla for updates to its car models.

Security against hacker attacks is vital for such connected cars, and ATS’s flagship product, OTA Plus v3, is supported by Uptane, a security framework that is being developed by the U.S. Department of Homeland Security.

HERE says its plans for ATS’s OTA technology includes both developing it as a standalone product and using it to boost other parts of its business that could also support secure map and software updates for other connected devices including drones.

Reporting by Jamillah Knowles; Editing by Douglas Busvine/Mark Heinrich