Shortly after its massive deal for Yahoo!, telecommunications giant Verizon has acquired fleet management firm Fleetmatics for $2.4 billion, it announced on Monday. The purchase is aimed at bolstering Verizon’s push into the Internet of Things (IoT) market.
It comes just one week after the cellular giant’s $4.8 billion purchase—which could rise to over $6 billion when taken altogether—of Yahoo’s core business.
Fleetmatics is one of the largest providers of fleet management tools, which include location, fuel, and speed data on trucks. With this data, the firm says it can improve performance and safety of drivers in the fleet.
Negotiations between the two companies started in May. Verizon received confirmation from its board soon after and a deal was agreed two months later. That is quick for Verizon; the company usually spends a few months deliberating a deal before making a decision.
We don’t know what Verizon intends to do with Fleetmatics once the deal is complete. It could remain independent of the Verizon brand or join the IoT unit, which is growing at a faster rate than Fleetmatics.
Verizon adds to fleet management depth with deal
This is Verizon’s second fleet management acquisition in 2016. The first happened in June, when Verizon acquired Telogis for an undisclosed amount. Telogis provides fleet management solutions to AT&T and its partner General Motors, so the acquisition was seen as a way for Verizon to profit from AT&T’s IoT success.
The carrier’s IoT unit made over $500 million in 2015, but Verizon said in October 2015 that it was not satisfied with the speed of growth. Since then, the strategy has changed to give partners more access to its platform and let them work on implementation of applications.
This is similar to the way IBM or Amazon Web Services works. Instead of providing the entire platform, the ThingSpace cloud product gives developers and enterprise clients tools to build what they want.