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SiriusXM buys Automatic Labs to expand connected-car offerings

What SiriusXM has planned for Automatic Labs is still anyone's guess, other than "print more money."

You might associate SiriusXM with that service you never activated in your new car, but it's clearly working to grow beyond that, as its latest acquisition shows.

SiriusXM just purchased Automatic Labs Inc., a San Francisco-based company that focuses on connected-car hardware. The deal reportedly cost SiriusXM more than $100 million.

OBDII dongles are a hot business right now, as safe drivers clamor to prove their risk-averse ways to save a few bucks on insurance.

Automatic Labs

Automatic Labs sells connected car adapters. They plug into a car's OBDII (on-board diagnostics) port, and can provide services like vehicle tracking, diagnostic alerts and fuel monitoring. Insurance companies can use its products, for example, to help coach new drivers or monitor how well someone drives, adjusting rates as necessary.

"The acquisition of Automatic is a natural fit for SiriusXM as we continue to expand and improve our connected vehicle services," said Jim Meyer, CEO of SiriusXM, in a statement. "Automatic's innovative products have brought safety and intelligence data and analytics to the forefront of vehicle connectivity. We are excited to welcome the talented employees at Automatic to SiriusXM as we expand the possibilities of connected vehicle offerings and services for manufacturers, drivers, and enterprises."

SiriusXM doesn't just deliver satellite radio to cars -- it delivers data. Certain infotainment functions rely on SiriusXM's services, like weather updates and traffic maps. It makes sense that SiriusXM would want to greater capitalize on data-driven car hardware.

Automatic Labs won't just be lumped in under the SiriusXM umbrella, though. Automatic's brand, as well as its products, will continue to function as normal. But now, SiriusXM will be able to leverage its relationship to provide new offerings and -- as businesses are wont to do -- make more money.