Verizon Communications said it will buy GPS vehicle tracking company Fleetmatics Group for about $2.4 billion in cash to expand into the connected vehicle and fleet management market. Verizon, the No. 1 U.S wireless company, will pay $60 per Fleetmatics share, a premium of about 40 percent to Friday’s close. The deal is expected to close in the fourth quarter of 2016.
Fleetmatics develops software that shows fleet operators vehicle location, fuel usage, speed and mileage, and other data on their mobile workforce, Verizon said.
As the market for smartphones and mobile devices gets saturated, Verizon and its biggest rival AT&T are hoping that connecting more objects and appliances to their networks will provide new revenue.
Verizon Telematics closed another deal, to buy California-based Telogis, which builds software to track commercial vehicles and navigation software used by automakers such as Ford Motor Co. Terms were not disclosed.
Verizon Telematics also offers its own fleet management service, called “Networkfleet.”
Fleetmatics’ international presence in regions such as Western Europe and Australia will help Verizon expand the global reach of its telematics business.