How Will Verizon Integrate Acquisitions?
Logos courtesy of Verizon and Fleetmatics.
Verizon Communications has created a leading telematics provider with its purchase of Telogis and Fleetmatics. With the closing of the latter transaction on Nov. 7, the company now controls about 1.4 million units used by commercial and government fleets to track their vehicles.
With regulatory approvals now in the rear-view mirror, the company is moving forward to merge Fleetmatics into Verizon Telematics and must eventually decide whether to merge its trio of telematics platforms, which includes its own Verizon Networkfleet telematics product.
"Right now, they are operating as independent companies with their own brands," said Clem Driscoll, a leading analyst of U.S. and global telematics markets. "Over time, will they integrate all under a single name, and will they integrate the platforms? Time will tell."
The combined company will have the advantage of greater scale in a landscape that still includes plenty of competitors.
"We have a unique opportunity to bring these companies together and capitalize on what has been a fragmented market," said Krys Grondorf, a company spokeswoman. "As these companies are combined we now have the benefit of security, scale and the ability to develop and market mobile resource management products and solutions anywhere in the world."
Whatever path Verizon chooses, pre-acquisition chief executives of Telogis and Fleetmatics won't be included in future plans. Andrés Irlando, CEO of Verizon Telematics, now oversees the three entities, according to a company spokeswoman.
Former Telogis CEO David Cozzens and CFO Kyle Messman left the Aliso Viejo, Calif., company on July 29. Cozzens reportedly retired. Fleetmatics CEO Jim Travers announced his retirement prior to the merger and will leave the company by the end of the year.
Verizon announced its bid to acquire privately-held Telogis on June 22 and finalized the deal on July 29. On Aug. 1, Verizon moved forward with its bid to buy Fleetmatics, announcing an agreement for $2.4 billion, or $60 per share traded on the NYSE.
The mergers have come at a time when the telematics industry has seen a series of acquisitions.
In August, AT&T announced it would be rolling out a GPS-based fleet, asset, and mobile workforce solution for commercial fleets under a partnership with Fleet Complete. In early October, Continental Corp. acquired a majority stake in Zonar Systems, which supplies factory telematics systems to Daimler.