Verizon is acquiring GPS vehicle-tracking company Fleetmatics for $2.4 billion in cash. The deal is part of Verizon's plan to broaden its portfolio beyond basic communication services and into the area of enterprise mobility
Based in Dublin, Ireland, Fleetmatics makes software that shows fleet operators vehicle location, fuel usage, speed, mileage, and other mobile workforce data. The business pitch is that this data can be used to reduce operating costs and increase revenue by boosting efficiency.
The acquisition is a follow up to Verizon's recent purchase of Telogis, another telematics provider focused on mobile workforce management. In addition to its SaaS portfolio, Telogis gave Verizon access to its bevy of partnerships with vehicle and equipment manufacturers and over 37,000 customers.
Both Telogis and Fleetmatics will become part of Verizon Telematics. Andres Irlando, CEO of the Verizon subsidiary, said the deal will allow Verizon to add more telematics services specifically for small and medium businesses.
Overall, the acquisition shows how Verizon is thinking about revenue growth for the long term. Verizon's core legacy business is declining, but the company is building up in other areas where it can use its massive network for enterprise logistics, mobility, and Internet of Things (IoT).
Of course, Verizon also just bought Yahoo's core internet business for $4.83 billion, giving the company significant revenue potential in the area of mobile advertising. Just over a year ago, Verizon bought AOL for $4.4 billion in a similar ad-revenue play.