SiriusXM is making a move to expand its presence in the telematics industry.
Telematics and connected vehicle solutions are key elements in the future of the auto industry. Sirius XM Radio plans to spend $530 million on an acquisition that will expand its ability to provide those services
Sirius XM Radio, which is now available on millions of vehicles, entered into a definitive agreement to acquire the connected vehicle services business of Agero Inc.
“The acquisition of Agero’s connected vehicle business is a natural fit for Sirius XM. As the world’s leading provider of in-vehicle subscription services, SiriusXM is uniquely positioned to offer world-class end-to-end telematics services,” said Jim Meyer, chief executive officer, SiriusXM.
“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. Agero’s connected vehicle team is known for their experience, innovation and technology, and we look forward to welcoming them to SiriusXM as we work to capture the significant growth opportunities in connected vehicle services,” he said.
The move makes Sirius XM a much bigger player in the telematics market.
“We expect telematics to develop into a meaningful business for Sirius XM over time, and also provide some comfort to investors that SiriusXM has something to gain from the connected car, rather than simply facing more audio competition,” James Marsh, an analyst at Piper Jaffray, said in a research note.
Privately held Agero Inc., which is based in Medford, Mass., furnishes roadside assistance and claims management services for auto manufacturers, insurance carriers, and drivers in North America and Europe.
The company offers safety and security, data and diagnostics, location based content, navigation, disaster response, and warranty, insurance, and service contract assistance. It also provides EV mobile charger, motor club and fleet services.
(The data collected from connected cars worth $1,400 annually. For more, Click Here.)
Roadside Connect, Agero’s connected vehicle unit, provides telematics services for drivers. Following the acquisition, SiriusXM will provide connected vehicle services to more automotive manufacturers — including Acura, BMW, Honda, Hyundai, Infiniti, Lexus, Nissan and Toyota — than any other telematics provider.
Overall, SiriusXM audio entertainment and data services are available in more than 50 million vehicles.
(Click Here to read about carmakers offering free telematics in battle for buyers.)
The transaction is expected to close in the fourth quarter of 2013. But it is subject to the expiration or early termination of the Hart-Scott-Rodino antitrust waiting period and other customary closing conditions.