Verizon Drives Into Fleet Management Space With $2.4B Acquisition
Showing no signs of slowing its recent acquisition activity, Verizon announced plans Monday to purchase Fleetmatics, a global provider of fleet and mobile workforce management software for $2.4 billion. Verizon will pay $60 per share, a premium of about 40 percent to Fleetmatics' closing price on Friday, according to Reuters.
Fleetmatics’s software-as-a-service offerings are geared at small- and medium-sized businesses.
Based in Dublin, Ireland with US headquarters outside of Boston, Fleetmatic’s tools provide fleet operators with insights into vehicle location, fuel usage, speed, mileage and other data about their mobile workforce. The goal is to help businesses reduce operating costs and increase revenue.
“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, chairman and CEO of Fleetmatics.
Fleetmatics has more than 37,000 customers, approximately 737,000 vehicle subscriptions and 1,200 employees focusing on helping businesses solve the challenges of deploying mobile workforces, according to Travers.
In addition to capitalizing on market fragmentation, the acquisition will also help Verizon capture market share in the “pretty under-penetrated” fleet and mobile workforce management business, Andres Irlando, CEO of Verizon Communications subsidiary Verizon Telematics, told Reuters.
Last week Verizon Telematics closed a deal to acquire Telogis, a global cloud mobile enterprise management software company. The subsidiary operates in more than 40 global markets and offers wireless, software and hardware tools to consumers, enterprises, automakers and dealers to power connected vehicle products around the world.
The nation’s largest wireless carrier, Verizon also just announced it will buy Yahoo’s core internet business for $4.83 billion to help it increase revenue potential in mobile advertising. Last year, Verizon bought AOL for $4.4 billion.
The Fleetmatics deal is subject to regulatory and shareholder approvals and is expected to close in the fourth quarter of 2016.