Verizon, in Bid to Diversify, Sets$2.4 Billion Deal for Fleetmatics -- WSJ

By Joshua Jamerson 

Verizon Communications Inc. said Monday that it agreed to acquire mobile workforce-solutions company Fleetmatics Group PLC for $2.4 billion, widening Verizon's fleet operations as it looks to diversify.

The deal, at $60 a share in cash, represents a nearly 40% premium to Fleetmatics closing price Friday of $42.96.

Shares of Fleetmatics rose 39% to $59.66 in morning trading in New York and are up 65% in the past three months. Verizon stock, up 20% this year, edged down 0.1% to $55.35.

Fleetmatics' web-based GPS tracking systems allow fleet operators to monitor vehicle location, fuel usage, speed and mileage, and other insights into their mobile workforce.

Fleetmatics opened on the New York Stock Exchange in 2012 at $22.95, up from its $17 offer price. Investors were attracted to the company because its cloud-computing model made adoption easy for small-to midsize business without other infrastructure or sophisticated users.

The Dublin-based company has roughly 737,000 subscribers and 1,200 employees. Its North American headquarters are in Waltham, Mass.

Last week, Verizon closed its acquisition of mobile enterprise management software company Telogis Inc.

That transaction, as well as the Fleetmatics deal, came amid Verizon's bidding for Yahoo Inc., which it last week agreed to buy for $4.8 billion.

For New York-based Verizon, the Yahoo deal represents a bet that the troubled web company will give it a leg up as it tries to build a digital media and advertising empire. Meanwhile, the Fleetmatics deal reflects its strategy of connecting objects to the internet wirelessly. Both come as Verizon, the nation's largest U.S. wireless carrier, is diversifying away from being a telephone and internet provider.

The Fleetmatics transaction, subject to regulatory approvals and closing conditions such as the approval of Fleetmatics shareholders, is expected to close in the fourth quarter.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

August 02, 2016 02:48 ET (06:48 GMT)

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