Sirius XM Radio has entered into an agreement to acquire the connected vehicle services business of Agero, Inc. for $530 million in cash. Agero is a provider of innovative telematics services, offering safety, security, and convenience services for drivers and end-to-end, turnkey solutions for automakers.
Once the acquisition is complete, SiriusXM will provide connected vehicle services to automotive manufacturers such as Acura, BMW, Honda, Hyundai, Infiniti, Lexus, Nissan and Toyota.
Matt Josefowicz, managing partner for Novarica, n insurance technology research and consulting firm believes the deal gives SiriusXM relationships with a broad range of car manufacturers.
"Conceivably, they could become an OnStar-like source of telematics data for the insurance industry," says Josefowicz.
Donald Light, director Americas property & casualty preactice for Celent, believes this deal highlights the current and future value of providing connectivity, information, and services to cars and drivers.
"Insurers offering usage-based insurance are playing in one part of a much broader arena," says Light. "Can they master the UBI-telematics sector, as well as play in the adjacent areas of safety, diagnostics, navigation, and entertainment?"
SiriusXM already holds a footprint among major car manufacturers with its audio entertainment and data services available in more than 50 million vehicles. Telematics and connected vehicle solutions are key elements in the future of the auto industry. The acquisition of the connected vehicle business of Agero establishes SiriusXM as provider for services in this growing industry.
"The acquisition of Agero's connected vehicle business is a natural fit for Sirius XM. As a provider of in-vehicle subscription services, SiriusXM is positioned to offer world-class end-to-end telematics services," says Jim Meyer, CEO of 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."
The transaction is expected to close in the fourth quarter of 2013.
"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," says Meyer.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.