Verizon to Buy Hughes Telematics for $612M

by Christopher Freeburn | June 1, 2012 1:25 pm

Verizon (NYSE:VZ[1]) announced today that it will purchase[2] Hughes Telematics (PINK:HUTC[3]) for $612 million.

Under terms of the agreement, Verizon will pay $12 for each Hughes share, a 176% premium on the company’s over-the-counter shares, Reuters noted. The transaction is expected to finalize in the third quarter.

Shares of Verizon fell more than 1% in Friday afternoon trading in a sharply lower market.

Hughes provides GPS-based tracking and wireless communications systems used by manufacturers, fleets operators, vehicle dealers and consumers. Verizon officials said combining its existing enterprise systems with Hughes’ service-delivery platform would allow the company to offer services beyond the transportation sector.

After the merger, Hughes will become a subsidiary in Verizon’s Enterprise Solutions unit. The company’s current management team will remain in place.

UBS Investment Bank (NYSE:UBS[4])┬áprovided guidance for Verizon during the deal’s negotiations. The acquisition must still clear federal anti-trust regulators.

Endnotes:
  1. VZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=VZ
  2. that it will purchase: http://www.reuters.com/article/2012/06/01/verizon-acquisition-idUSL4E8H168520120601
  3. HUTC: http://studio-5.financialcontent.com/investplace/quote?Symbol=HUTC
  4. UBS: http://studio-5.financialcontent.com/investplace/quote?Symbol=UBS

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