Verizon Boosts Telematics Unit with $2.4 Billion Fleetmatics Buy
Only days after announcing its plans to acquire Yahoo’s operating business, wireless and broadband communications provider Verizon said today that it will also be acquiring Fleetmatics Group for approximately $2.4 billion in cash. Fleetmatics is a global provider of mobile GPS tracking technology for fleet operators.
Although the company is based in Dublin, Ireland, Verizon said the impetus for the acquisition was Fleetmatics’ presence in North American and international markets. "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 Andres Irlando, CEO of Verizon Telematics, in a statement.
Verizon has been on something of an acquisition tear lately. Last week’s acquisition of Yahoo was valued at around $4.83 billion. While the Yahoo deal was seen as an attempt to gain access to the company’s audience of more than 1 billion users, it also fit in nicely with Verizon’s plans to grow its mobile business. Around 60 percent of Yahoo’s active monthly users are mobile users.
But the Fleetmatics deal seems more closely tied to Verizon’s June acquisition of Telogis, a cloud-based mobile enterprise management software company. Telogis was folded into Verizon’s telematics division, which offers wireless, software and hardware solutions to consumers, enterprises, automakers, and dealers to power connected-vehicle products around the world. Verizon said Fleetmatics will likewise be absorbed into its telematics business.
"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," Irlando said.
Expanding into Enterprise IT Services
The acquisition will bring Verizon approximately 1,200 new employees, 37,000 clients, and 737,000 subscribers, the company said. Although Fleetmatics is headquartered in Ireland, its North American headquarters is in Waltham, Mass.
Fleetmatics' Web-based solutions provide fleet operators with information about vehicle location, fuel usage, speed and mileage, and other insights into their mobile workforce, helping them to reduce operating costs, as well as increase revenue, according to the company. Its customers include enterprise clients such as DirecTV and Time Warner Cable.
Those clients, along with Fleetmatics’ enterprise management technology, should help Verizon build out its enterprise IT service business. With growth slowing or declining in legacy businesses such as Verizon’s landline and high-speed Internet service, the company needs to expand into other areas to maintain topline growth.
“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.” Jim Travers, chairman and CEO of Fleetmatics, said in a statement about the merger.