Verizon (NYSE: VZ) continues to pursue the telematics market, agreeing to spend $2.4 billion to acquire Ireland's Fleetmatics.
Fleetmatics offers a software platform providing GPS vehicle management and other services to companies with mobile workforces. The company serves more than 37,000 customers and raised $93 million in funding before going public in 2012.
The nation's largest mobile carrier last month acquired Telogis, which provides similar services, but terms of that deal weren't disclosed. The Fleetmatics deal marks a nearly 40 percent premium over its shares, which closed Friday at $42.96.
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"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, in a press release. "The powerful combination of products and services, software platforms, robust customer bases, domain expertise and experience, and talented and passionate teams among Fleetmatics, the recently-acquired Telogis, and Verizon Telematics will position the combined companies to become a leading provider of fleet and mobile workforce management solutions globally."
Verizon last year launched "Hum," an after-market connected vehicle offering targeted at consumers, and CFO Fran Shammo said in April that Hum devices were a "large contributor" to the 176,000 connected gadgets other than smartphones and tablets that Verizon added during the first quarter of 2016. With the acquisitions of Fleetmatics and Telogis, Verizon is clearly targeting the enterprise market for connected cars as well.
Verizon Telematics, which is a subsidy of Verizon Communications, operates in more than 40 markets worldwide and provides wireless, software and hardware solutions to consumers, businesses, carmakers and dealers.
"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," Fleetmatics CEO Jim Travers said in prepared remarks. "We are excited to partner with Verizon in fulfilling the mission of becoming the largest mobile workforce management company in the world."
The deal once again underscores Verizon's eagerness to expand beyond traditional mobile services as growth in the U.S. smartphone market slows. The news follows last week's announcement that Verizon will spend $4.83 billion to acquire Yahoo's core online assets.
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