Sirius XM to Acquire Connected Vehicle Unit of Agero

Sirius XM Radio has entered into a definitive agreement to acquire the connected vehicle services business of Agero, Inc. for $530 million in cash.

The connected vehicle unit of Agero is a leading provider of innovative telematics services, according to Sirius, offering safety, security and convenience services for drivers and end-to-end, turnkey solutions for automakers. Following the acquisition, Sirius XM will provide connected vehicle services to numerous automotive manufacturers, including Acura, BMW, Honda, Hyundai, Infiniti, Lexus, Nissan and Toyota.

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Sirius XM offers “unparalleled audio entertainment and data services available in more than 50 million vehicles,” the company said in a statement. “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 Sirius XM as the leading provider for services in this growing industry.”

“The acquisition of Agero’s connected vehicle business is a natural fit for Sirius XM,” said Jim Meyer, Chief Executive Officer, Sirius XM. “As the world’s leading provider of in-vehicle subscription services, Sirius XM is uniquely positioned to offer world-class end-to-end telematics services.”

Meyer said the transaction accelerates Sirius XM’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 Sirius XM as we work to capture the significant growth opportunities in connected vehicle services.”

The transaction is subject to the expiration or early termination of the Hart-Scott-Rodino antitrust waiting period and other customary closing conditions. The transaction is expected to close in the fourth quarter of 2013. Morgan Stanley acted as financial advisor to Sirius XM in connection with this transaction.