One week after planting roots in the mobile advertising and digital media markets with its proposed $4.83 billion purchase of Yahoo, Verizon agreed Monday to acquire vehicle tracking firm Fleetmatics in a $2.4 billion transaction that corresponds with Verizon’s strategy of positioning itself as a major player in the Internet of Things (IoT).
Based in Dublin, Ireland, Fleetmatics markets web-based GPS tracking systems to commercial trucking companies that enable fleet operators to track vehicle location, fuel usage, speed, mileage and other data in real time. With roughly 737,000 customers and a U.S. office in Waltham, Massachusetts, Fleetmatics, in the words of a Verizon spokesman, is “a market leader in North America, and, increasingly, internationally.”
According to analysts, the automotive services market and the related “telematics” systems segment through which companies control large vehicle fleets have already evolved as the most developed sectors of the IoT. Bolstered by Verizon’s 2012 purchase of Hughes Telematics and by Verizon’s recent acquisition of Telogis, Verizon’s Telematics division reported $500 million in sales during the first half of 2016 and is expected to grow at a year-over-year rate of 25%. Hinting at the promise that the Fleetmatics acquisition may hold, analysts say the addition of Fleetmatics at an earlier stage this year could have boosted revenues at Verizon Telematics by as much as 40% during the first half of 2016. Contingent upon receipt of shareholder and regulatory approvals, the parties aim to complete the transaction during the fourth quarter.