Categories: Carriers

Verizon to acquire Hughes; looks to bolster M2M

Verizon to acquire Hughes; looks to bolster M2M

Verizon Communications is betting big on the machine-to-machine space, and by big we mean $612 million big.

The telecom giant announced this morning that it plans to acquire Hughes Telematics for $12 per share, or a total of $612 million, in a move to bolster its presence in the automotive and fleet telematics space. The price premium over Hughes closing price of $4.35 yesterday shows the level of interest Verizon has for the space, an amount not lost on Hughes’ management.

“This transaction provides Hughes Telematics’ stockholders with a substantial premium over today’s market price of our common stock,” was the opening comment from Hughes CEO Jeff Leddy in a press statement, showing both the importance of the pricing premium as well reassuring investors that this is a pretty good deal. The proposed transaction was unanimously approved by Hughes board of directors and has been approved by a written consent executed by holders of a majority of the company’s voting shares.

Hughes currently provides connected services to commercial fleets, original equipment manufacturers, aftermarket equipment providers and to the mobile health industry. Analysts note Hughes currently counts 100,000 commercial vehicle installations. Verizon said it expects the deal to close during the third quarter and plans to maintain Hughes existing management team based in Atlanta, and will operate under its Verizon Enterprise Solutions group.

“We expect M2M and telematics to drive significant growth for Verizon and we’re taking an important step forward to accelerate solutions that will unlock more opportunities for existing and new [Hughes] and Verizon customers,” said John Stratton, president of Verizon Enterprise Solutions, in a stament. “In powerful combination with Verizon’s global IP network, cloud, mobility and security solutions, Hughes Telematics’ flexible service-delivery platform has the potential to reach beyond the automotive and transportation realm to create new opportunities in m-health, asset tracking and home automation.”

The move also comes just weeks after rival AT&T Mobility released its Digital Life suite of home automation products that will see the carrier become a home monitoring company.

Bored? Why not follow me on Twitter?

Leave a Reply

  • Subscribe to RCR eNewsletters

  • Polls

    Will mobile operators adopt WebRTC technology?

    View Results

  • RSS Featured Jobs

  • RSS TelecomCareers Featured Jobs

  • Featured Video

    IBM Talks Apple Deal and Telecom Plans

  • Featured Events

    9/7-10: CCA Annual Convention Las Vegas, NV

    9/9-11: CTIA Super Mobility Week Las Vegas, NV

    10/13-16: Futurecom Sao Paulo, Brazil

    10/15-16: HetNet Forum Chicago, IL