Radio broadcaster Sirius XM Radio Inc. (SIRI: Quote) on Thursday said that it has entered into a definitive agreement to acquire the connected vehicle services business of Agero, Inc., a provider of vehicle and driver safety and security services, for $530 million in cash. The company expects the deal to position it as a leading telematics service provider.
The company expects to close the deal in the fourth quarter of 2013, subject to the expiration or early termination of the Hart-Scott-Rodino antitrust waiting period and other customary closing conditions.
Agero's divesting unit provides innovative telematics services, offering safety, security and convenience services for drivers and end-to-end, turnkey solutions for automakers.
SiriusXM expects the acquisition of the connected vehicle business to establish it as a leading provider for services in the growing auto industry. Following the acquisition, SiriusXM said it will provide connected vehicle services to more automotive manufacturers, including Acura, BMW, Honda, Hyundai, Infiniti, Lexus, Nissan and Toyota, than any other telematics provider.
Jim Meyer, Chief Executive Officer, SiriusXM said, "The acquisition of Agero's connected vehicle business is a natural fit for Sirius XM.... The transaction accelerates SiriusXM's development in architecture supporting connected vehicle services, as well as the ability to provide services over both satellite and cellular networks."
In a statement, Dave Ferrick, CEO of Agero, said, "While telematics has been an important and growing part of our business, this divestiture allows us to focus our resources in our roadside vehicle assistance, claims management and information services which will allow us to best serve our clients and their customers in a fast-changing marketplace."
Agero, which currently works with 70 percent of the top automotive manufacturers in the US and 8 of the top 10 automotive insurance carriers, said it will continue to accelerate the development and delivery of new services.
In the transaction, Morgan Stanley acted as financial advisor to SiriusXM. Agero is being advised in the transaction by TAP Advisors.
In pre-market activity, SiriusXM shares are currently trading at $3.78, up $0.02 or 0.53 percent.
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by RTT Staff Writer
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