Verizon to Acquire Fleetmatics for $2.4B
The telecom giant said buying the GPS vehicle tracking firm Fleetmatics will widen its expansion into the connected vehicle and fleet management market.
NEW YORK – Verizon Communications (NYSE: VZ) has agreed to acquire vehicle-tracking company Fleetmatics Group PLC (NYSE: FLTX) for $2.4 billion, a transaction the telecom giant said would broaden its fleet management and mobile workforce solutions operations.
Verizon will pay $60 per share, a premium of about 40% to Dublin, Ire.-based Fleetmatics’ closing price on Friday (July 29). The company has approximately 737,000 subscribers and 1,200 employees. Its North American headquarters are in Waltham, Mass.
Fleetmatics’ Web-based GPS tracking systems allow fleet operators to monitor vehicle location, fuel usage, speed and mileage, among other actionable business intelligence from real-time and historical vehicle and driver behavioral data.
In June, Verizon Telematics announced the acquisition of Telogis, a global, cloud-based mobile enterprise management software company based in Aliso Viejo, Calif. The company previously bought Hughes Telematics in 2012. The Telematics division posted $400 million in sales in the first half, with the business growing about 25% year-over-year, making it one of the carrier’s fastest-growing segments, according to a Bloomberg Intelligence analysis.
In a press release, Verizon said the acquisitions will position the combined companies to become a global leader in providing fleet and mobile workforce management solutions.
“Verizon and Fleetmatics share a vision that the SaaS [Software as a Service]-based fleet management solution market is extraordinarily large, lightly penetrated, global and fragmented which can best be attacked together with a world class product offering and the largest distribution channel in the industry,” said Jim Travers, chairman and CEO of Fleetmatics.
According to Imperial Capital, Fleetmatics has collected a database of more than 87 billion data points since its inception in 2004. That data largess “provides Fleetmatics with opportunities to develop complementary business intelligence solutions and additional sources of revenue over time,” Imperial Capital wrote in an investor’s report.
Verizon has an existing agreement to provide 4G LTE network services to Alarm.com, a leading platform of interactive wireless services for homes and small businesses.
“We believe Verizon is focused on gaining share with SaaS businesses that collect and transmit premises and mobile data to improve residential and business day-to-day solutions,” Imperial Capital wrote.
The acquisition is subject to customary regulatory approvals and closing conditions, including the approval of Fleetmatics’ shareholders. It is expected to close in the fourth quarter of 2016. The deal for Fleetmatics comes one week after Verizon secured the core assets of Yahoo for $4.83 billion, ending a months-long bidding process.
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