Automakers aren't the only ones cashing in on the connected-car revolution -- telematics companies are making sure to get their piece of the pie. In an effort to bolster its own portfolio, telecom giant Verizon is buying Fleetmatics, a company specializing in fleet management services.
Verizon will buy Fleetmatics for $2.4 billion, approximately $60 per share. The deal should close later this year, and the company's share price leapt up in premarket trading. Fleetmatics specializes in software that allows fleet managers to keep track of location, fuel usage, mileage and more.
"Fleetmatics is a market leader in North America -- and increasingly internationally -- and they've developed a wide-range of compelling SaaS [software-as-a-service] based products and solutions for small- and medium-sized businesses," said Andrés Irlando, CEO of Verizon Telematics, an arm of the telecom giant.
While there's no word what Fleetmatics' assets will be used for, it's likely that the company will utilize its new acquisition to help bolster its connected-car offerings. Right now, Verizon sells the Hum, a device that plugs into your car's diagnostics port. For a recurring fee, Hum gives you access to vehicle diagnostics, emergency roadside assistance and location services.
With the benefits of Fleetmatics' products, Hum could become even more capable than it currently is. Hum could also be used to send relevant data to insurers, who could use it to offer lower premiums for safer drivers, similar to how Progressive's Snapshot works.