Verizon buys Fleetmatics to strengthen its enterprise mobility services

Barely a week after acquiring Yahoo Inc., Verizon has announced another huge purchase: Fleetmatics, a Dublin-based telematics company, for $2.4 billion in cash, to build out the products that it offers to enterprises in the areas of logistics and workforces that are on the move.

The acquisition is the latest in the list of deals that Verizon has been making lately to expand its operations in fleet management, mobile workforce solutions, and IoT; about six weeks ago, Verizon Telematics announced that it would acquire Telogis.

Fleetmatics is an an SaaS-based provider of GPS and other services to fleets and companies with mobile workforces. It has 37,000 customers, 737,000 subscribers, and 1,200 employees. The services that it offers include location services, driver and car security services, fuel tracking, dispatching and billing/invoice services.

Verizon Telematics CEO Andres Irlando says the deal was done to build up its telematics services for small and medium businesses. “Fleetmatics is a market leader in North America — and increasingly internationally — and they’ve developed a wide-range of compelling SaaS-based products and solutions for small- and medium-sized businesses,” he said in a statement.

“Verizon and Fleetmatics share a vision that the SaaS-based fleet management solution market is extraordinarily large, lightly penetrated, global and fragmented which can best be attacked together with a world class product offering and the largest distribution channel in the industry,” said Jim Travers, Chairman, and CEO of Fleetmatics, in a statement.

For quite some time, Verizon has been trying to venture into newer areas to offset continuing declines in its core, legacy business of basic phone services. As that market has become increasingly commoditized and people turn to other, digitized forms of communication away from traditional voice services, Verizon is hoping to invest into newer areas to move beyond “dumb pipe” status to keep its margins up, and revenues growing.

While its acquisition of AOL (and now Yahoo) will help Verizon scale up its media, advertising, and content operations, Fleetmatics is pointing straight to Verizon’s ambitions in enterprise services, and specifically, enterprise mobility.