Verizon will pay $60 a share for the Dublin-based company, a 40% premium to Fleetmatics’ closing price last week.
The deal is expected to close in the fourth quarter.
With its wireless business slowing, Verizon has been pursuing new sources of growth, such as connected-device subscriptions, video streaming, advertising, and mobile-workforce management.
In June, Verizon Telematics acquired Telogis, a cloud-based mobile enterprise management software company based in California. That transaction closed last week.
Verizon ended June with net debt of $96.9bn, or 2.2 times adjusted earnings before interest, tax, depreciation, and amortisation.
After announcing its deal to buy Yahoo’s web assets for $4.83bn last week, the company said that by 2019, its credit rating profile will be back to where it was before its 2014 agreement to buy out partner Vodafone’s stake in Verizon Wireless.
Before that transaction, Verizon’s net debt was around 1.5 times earnings.
Shares of Verizon fell around 1% at one stage in New York and had climbed 18% this year. Fleetmatics’ shares soared 38% to $59.58.
PJT Partners and Wells Fargo Securities are Verizon’s financial advisers on the deal and Cleary Gottlieb Steen & Hamilton, A&L Goodbody, and Macfarlanes are providing legal advice.
Morgan Stanley is serving as financial adviser to Fleetmatics.