On Friday, Verizon Communications Inc. announced that it is acquiring Hughes Telematics, Inc (HTI) for $612 million, or $12.00 per share in cash.
HTI (Atlanta, Ga., USA) is a provider of connected services for vehicles, centered on a core platform of safety, security, convenience and infotainment offerings. HTI offers a portfolio of services through its commercial fleet, aftermarket and original equipment manufacturer (OEM) offerings as well products and services for mHealth providers and users.
Steve Hilton, principal analyst at Analysys Mason , predicts more M2M acquisitions- similar to Verizon’s acquisition of HTI – will be made during the second quarter of 2012.
“This acquisition is exactly what a carrier should be doing to better position itself in the M2M sector,” says Hilton.
According to Hilton, carriers should be looking to acquire good technology products for M2M, as well as channels to market: both of these Hughes Telematics possess.
“Hughes Telematics provides a fairly comprehensive telematics offering with good integrations,” says Hilton. “[The company also] has existing relationships with SIs and enterprises that integrate and buy these types of telematics solutions. HTI provides Verizon with more channel capacity to get its M2M products to market.”
The merger is expected to close in the third quarter of 2012, and Verizon plans to maintain the existing management team and operate the new unit as a subsidiary within Verizon and operated as part of its Verizon Enterprise Solutions group. The business will continue to be headquartered in Atlanta, says Verizon.
"We expect M2M and telematics to drive significant growth for Verizon and we're taking an important step forward to accelerate solutions," said John Stratton, president of Verizon Enterprise Solutions.
HTI will play a key role in Verizon's strategy to offer platform-based solutions tailored to specific industries. Verizon earlier this year launched a new practice focused on developing telematics solutions that leverage the company's cloud and information technology (IT), security, global IP network and communications, and mobility and M2M technology platforms.