NEW YORK (AP) - Verizon Communications Inc. is paying $612 million for a company that provides wireless connectivity to cars and trucks.
The New York company said that it is buying Hughes Telematics Inc., which provides hardware and services for Mercedes and Volkswagen cars in the U.S. Verizon Wireless already provides wireless connectivity to General Motors Co.'s OnStar service. Verizon owns 55 percent of Verizon Wireless.
Verizon is paying $12 per share for Hughes, more than double the Atlanta company's closing price Thursday in the thinly traded over-the-counter market. Hughes stock popped $7.50 to $11.85 Friday morning. Verizon shares dipped 18 cents to $41.46.
Most of Hughes' revenue comes from fleet management equipment and services for customers like trucking companies. But Verizon said the company's technology has the potential to go beyond the auto and transportation markets, with opportunities to grow into healthcare and products for the home.
Hughes was founded in 2006 and lost $81.2 million last year on $71.3 million in revenue. It had 374 employees at the end of 2011. Private equity firm Apollo Global Management LLC is a major investor in Hughes.
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