Verizon spends $2.4bn on Fleetmatics to boost role in mobile workforce solutions
Verizon Communications Inc. and Fleetmatics Group PLC have entered an agreement under which Verizon will acquire Fleetmatics, a global provider of fleet and mobile workforce management solutions.
The purchase is for US$60.00 per share in cash, valuing the Ireland-based business at approximately $2.4 billion. Jeremy Cowan reports.
Andrés Irlando, CEO of Verizon Telematics says, “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.”
“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,” he adds.
According to Jim Travers, chairman and CEO of Fleetmatics, “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.”
“Fleetmatics brings over 37,000 customers, approximately 737,000 subscribers, a broad portfolio of industry leading products, and a team of 1,200 professionals focused on solving the critical challenges of businesses that deploy mobile workforces. We are excited to partner with Verizon in fulfilling the mission of becoming the largest mobile workforce management company in the world,” Travers adds.
In June, Verizon Telematics also announced the acquisition of Telogis, Inc., a global, cloud-based mobile enterprise management software company based in Aliso Viejo, California. That transaction closed on July 29.
Fleetmatics (NYSE: FLTX) is headquartered in Dublin, Ireland, with approximately 1,200 employees. Its North American headquarters are in Waltham, Mass. The company’s web-based solutions provide fleet operators with visibility into 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.
Verizon Telematics, a subsidiary of Verizon Communications (NYSE, Nasdaq: VZ), operates in more than 40 markets worldwide and offers comprehensive wireless, software and hardware solutions to consumers, enterprises, automakers and dealers to power connected-vehicle products around the world.
What are the implications for the Internet of Things (IoT) ecosystem?
Independent analyst, Dima Tokar, CTO and head analyst at US-based MachNation tells IoT Global Network that Verizon is purchasing Fleetmatics for its customers rather than its technology. “We anticipate Verizon will use some pieces of Fleetmatics’ technology and combine it with Verizon’s other telematics technology offerings from Telogis and Hughes Telematics.”
He continues, “This acquisition of Fleetmatics is set to offer small and medium businesses (SMBs) the same quality of integrated fleet and workforce management solutions as large enterprises. SMBs account for 99% of all businesses – over 200 million – in the world. Of those 200 million businesses, 50% would benefit from various types of fleet and workforce management solutions.”
Fleet management has been one of the most productised IoT offerings to date, says MachNation. Enterprises adopting IoT fleet management often find cost reductions in fuel, labour and theft costs of 10-20%. Fleet management, while a highly competitive sector, has already been a successful technology sector for more than 15 years.
According to the analyst firm’s IoT forecasts, IoT will generate $98 billion in worldwide revenue in 2016 growing to approximately $1 trillion by 2025 at a 29% compound annual growth rate.
Verizon reports that the acquisition is subject to customary regulatory approvals and closing conditions, including the approval of Fleetmatics’ shareholders and the sanction by the Irish High Court of the Irish scheme of arrangement by which Verizon will acquire Fleetmatics. The deal is expected to close in the fourth quarter of 2016.
(Source: Verizon Communications. Additional reporting by Jeremy Cowan).