(By Balachander) Verizon Communications Inc. (NYSE: VZ) is acquiring Hughes Telematics Inc. (HTI) for $12.00 per share in cash, or a total of $612 million, to bolster its presence in automotive and fleet telematics.
The deal represents a premium of 176 percent over Hughes' previous closing price of $4.35 on Over-The-Counter Bulletin Board.
Atlanta, Georgia-based Hughes Telematics provides vehicle information-based technologies, offering location-based services for consumers, manufacturers, fleets and dealers through two-way wireless connectivity.
New York-based Verizon also expects the deal to accelerate growth in emerging machine-to-machine (M2M) services applications.
"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 mHealth, asset tracking and home automation," said John Stratton, president of Verizon Enterprise Solutions.
In-Drive, HTI's aftermarket solution, offers safety and security services. HTI's Networkfleet unit provides remote vehicle diagnostics, an integrated GPS tracking and emissions monitoring system for wireless fleet vehicle management. A majority owned subsidiary of HTI, Lifecomm plans to offer mobile personal emergency response services through a wearable lightweight device with one-touch access to emergency assistance.
Verizon was represented by UBS Investment Bank and Debevoise & Plimpton LLP. HTI was represented by Barclays and Skadden, Arps, Slate, Meagher & Flom LLP.
The deal is expected to be completed in the third quarter of 2012.
VZ shares closed at $41.64 on Thursday.