Verizon Communications Inc. (NYSE:VZ) has announced that it is acquiring GPS company FleetMatics Group PLC (NYSE:FLTX) for $2.4 billion.
The deal will have Verizon paying $60 per share
for Fleetmatics, which is headquartered in Dublin, Ireland. The transaction will be funded with cash. FLTX’s closing price on Friday was $55.37, which makes VZ’s offer about a 40% premium over that.
Fleetmatics is a provider of mobile workforce solutions. It has over 37,000 customers and 737,000 subscribers. Its staff includes 1,200 professionals focused on helping businesses deploy mobile workforces.
Fleetmatics’ technology allows it to provide fleet operators with a variety of information. This includes “visibility into vehicle location, fuel usage, speed and mileage,” and other insights into mobile workforces. This can help businesses reduce costs and increase revenue.
Verizon is seeking approval from Fleetmatics shareholders and regulators before it can complete the deal. It also needs approval of its plan to buy the company via the Irish High Court.
Verizon said that it expects the acquisition of Fleetmatics to be completed during the fourth quarter of 2016. FLTX has announced that it won’t be releasing its earnings report that was previously scheduled for release on Aug. 9, 2016. It has also withdrawn its previous guidance for the year that it announced on May 4 of of 2016..
“We were not surprised by the announcement as the sector has been consolidating at an aggressive pace and Verizon recently amped up investments in the (fleet management software) arena with the acquisition of Telogis,” Kenneth Wong, an analyst at Citigroup, told Fortune.
FLTX shares were up 38% as of Monday afternoon.
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