Sirius XM Radio Inc. has reached an agreement to purchase the connected-vehicle services business of Agero Inc. for $530 million in cash. The purchase means Sirius would have the capability to provide telematics services for vehicles like security, safety and other technologies. The concerned companies are expected to finalize and complete the transaction in the fourth quarter of 2013, Sirius said in a statement.
Sirius currently offers radio and data services in more than 50 million vehicles. Sirius said the acquisition will enable it to provide connected-vehicle services to more carmakers like Acura, BMW, Honda, Hyundai, than any other provider. Sirius chief executive Jim Meyer said in the statement that the deal accelerates the company's "development in architecture supporting connected vehicle services, as well as the ability to provide services over both satellite and cellular networks."
In July, Sirius selected AT&T to provide mobile connectivity for the telematics system it is developing for Nissan Motor Co. in North America. Nissan selected SiriusXM to be its exclusive telematics supplier in September 2012.
Agero currently serves over 75 million vehicle owners in partnerships with carmakers, insurance carriers and others. Agero chief executive Dave Ferrick remarked that while telematics has been an important and growing part of their business, selling its connected-vehicle services business will enable them to focus their resources in their roadside vehicle assistance, claims management and information services. [source: Bloomberg]