Acquisition to help Verizon accelerate growth in key vertical segments
US-based Verizon Communications today said it will acquire Hughes Telematics for $612 million which will help to expand capabilities in automotive and fleet telematics marketplace.
The acquisition will also help Verizon accelerate growth in key vertical segments, including emerging machine-to- machine (M2M) services applications driven by consumer trends and increasingly connected lifestyles, Verizon said in a statement today.
New York-headquartered Verizon Communications delivers broadband and other wireless and wireline communications services to consumer, business, government and wholesale customers. A Dow 30 company with $111 billion in 2011 revenues, Verizon has a headcount of nearly 192,000.
The Board of Directors of Hughes Telematics has approved the transaction upon the recommendation of its special committee. It has also received approval by a written consent executed by holders of a majority of Hughes' voting shares.
The merger is expected to close in the third quarter of 2012.
Verizon plans to retain the existing management team and operate the new unit as a subsidiary within Verizon and as part of its Verizon Enterprise Solutions group. The business will continue to be headquartered in Atlanta.
"We expect M2M and telematics to drive significant growth for Verizon and we're taking an important step forward to accelerate solutions that will unlock more opportunities for existing and new HTI and Verizon customers," Verizon President (Enterprise Solutions)John Stratton said.
Verizon was represented by UBS Investment Bank and Debevoise & Plimpton LLP. Hughes was represented by Barclays and Skadden, Arps, Slate, Meagher & Flom LLP.
The special committee of the Board of Directors of Hughes Telematics was represented by Moelis & Company LLC and Nelson Mullins Riley & Scarborough LLP.
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