Verizon Communications Inc. agreed to buy GPS vehicle-tracking company Fleetmatics Group in an all-cash deal valued at $2.4 billion, vaulting the telephone giant deeper into the automotive-technology market.
Verizon will pay $60 a share, a 40 percent premium to Fleetmatics’ closing price last week, according to a statement Monday. The company, based in Dublin, develops software that tracks commercial drivers’ vehicle location, fuel usage, speed and mileage for better fleet management. The deal is expected to close in the fourth quarter.
With its wireless business slowing, Verizon has been pursuing new sources of growth like mobile advertising and streaming video. The deal is the latest in an acquisitive streak for Verizon, following its $4.83 billion purchase of Yahoo last week.
The recent deals are unlikely to set Verizon back in its plan to improve liquidity. The company ended June with net debt of $96.9 billion, or 2.2 times adjusted earnings before interest, tax, depreciation and amortization. Even after the Yahoo deal was announced last week, Chief Financial Officer Fran Shammo said Verizon was still on track to restore its credit rating profile by 2019 to where it was before the 2014 deal to buy out partner Vodafone Group’s stake in Verizon Wireless. Before the Vodafone transaction, Verizon’s net debt was around 1.5 times earnings.