Verizon Communications will acquire leading telematics provider Fleetmatics Group for $2.4 billion in a cash deal that will create a powerhouse telematics provider, the telecommunications giant has announced.
Verizon's planned acquisition of Fleetmatics comes about a month after the company announced it would acquire privately held Telogis in a deal one expert pegged at nearly $400 million. Verizon is acquiring Fleetmatics for $60 a share. In morning trading, Fleetmatics shares increased more than 38% to over $59.55.
"Fleetmatics is a market leader in North America — and increasingly internationally — and they've developed a wide-range of compelling SaaS-based products and solutions for small- and medium-sized businesses," said Andrés Irlando, CEO of Verizon Telematics.
The deal is expected to close in the fourth quarter.
In late June, Verizon announced it would acquire Telogis, which is ranked in the top 10 of U.S. telematics providers. Fleetmatics is the largest such provider globally and in the U.S. Both companies primarily offer telematics as Software-as-a-Service (SaaS).
"Verizon and Fleetmatics share a vision that the SaaS-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, Fleetmatics' chairman and CEO.
Fleetmatics is headquartered in Dublin, Ireland, with North American headquarters in Waltham, Mass. The company’s Web-based solutions provide fleet operators with data around vehicle location, fuel usage, speed and mileage, and other insights into their mobile workforce.
Verizon Telematics, a subsidiary of Verizon Communications, operates in more than 40 markets worldwide and offers wireless, software and hardware solutions to consumers, enterprises, automakers and dealers to power connected-vehicle products around the world.
The acquisition is subject to customary regulatory approvals and closing conditions, including the approval of Fleetmatics' shareholders and the sanction of the Irish scheme of arrangement by which Verizon will acquire Fleetmatics by the Irish High Court.