Fleetmatics Group PLCNYSE
Fleetmatics: More Room To Run?
Alpha Gen Capital
Alpha Gen Capital
Mon, Aug. 1, 11:36 AM
- Verizon's (VZ -0.8%) $2.4B deal for Fleetmatics (FLTX +38.7%) didn't come as a surprise to Citigroup analyst Kenneth Wong, who noted an "aggressive pace" of consolidation in the sector.
- Verizon had announced a deal in June to buy fleet-management software maker Telogis as well. The Fleetmatics deal is in line with recent transaction multiples of 6 to 9 time recurring revenue, Wong says.
- “There has been significant consolidation across the fleet management space from across the auto ecosystem (OEMs, telco, pure play FMS vendors (FLTX mainly), fuel card providers, etc.) so we believe the bidding process was competitive," he writes.
- RBC's Matthew Hedberg calls it a "healthy multiple," saying the deal reflects "6.1x FTM EV/S vs. 5.1x for software acquisitions."
- Despite today's jump, Fleetmatics at $59.60 isn't quite that stock's 52-week high: It hit $62.86 in December and had fallen 31.7% since then.
Mon, Aug. 1, 8:09 AM
- Verizon (NYSE:VZ) announces it will acquire Fleetmatics (NYSE:FLTX) for $60.00 per share in a deal valued at approximately $2.4B. Shareas of FLTX closed at $42.96 on Friday.
- “Verizon and Fleetmatics share a vision that the SaaS-based fleet management solution market is extraordinarily large, lightly penetrated, global and fragmented which can best be attacked together with a world class product offering and the largest distribution channel in the industry,” said Fleetmatics CEO Jim Travers.
- The acquisition is subject to customary regulatory approvals and closing conditions, including the approval of Fleetmatics’ shareholders and the sanction of the Irish scheme of arrangement by which Verizon will acquire Fleetmatics by the Irish High Court, and is expected to close in the fourth quarter of 2016.
- As a result of today’s announcement, Fleetmatics has cancelled its earnings call previously scheduled for August 9, 2016 and has withdrawn its most recent guidance with respect to 2016.
- Source: Press Release