The transaction will enhance Verizon’s enterprise offering with capabilities in the automotive industry and other emerging M2M services. Hughes Telematics portfolio includes connected services for vehicles, as well as products and services for mHealth providers and users.
The Hughes Telematics board unanimously approved the transaction which equates to $12 per share, a premium of approximately 176% over the companies closing price before the announcement.
Verizon plans to retain the existing management team of the company and operate the new unit as a subsidiary within Verizon Enterprise Solutions. Its headquarters will remain in Atlanta.
John Hughes, president at Verizon Enterprise Solutions said that he expected the acquisition to drive significant growth for the company.
“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,” he said.
The transaction is subject to regulatory approval and is expected to close in the third quarter of 2012.
