Agero, Pride of Medford, Sells Texas Business to SiriusXM for $530M
An interesting automotive deal today involves people and companies in at least three states.
Medford, MA-based Agero is selling off its connected-vehicle business, based mostly in Irving, TX, to radio broadcaster Sirius XM, based in New York City. The price tag is $530 million in cash, and the deal is expected to close in the fourth quarter of 2013.
The business unit being divested is concerned chiefly with telematics systems for navigation and entertainment, as well as communicating things like speed and gas mileage to drivers via the dashboard.
Sirius XM Radio (NASDAQ: SIRI) looks to be trying to strengthen its position in telematics, as well as build closer ties with car manufacturers it already works with in its satellite radio services.
Meanwhile, Agero says it will be focusing on its two remaining business units—roadside assistance systems, and informatics and analytics technologies to relay data back to auto manufacturers and insurance providers. For example, data on which parts of various models tend to break down is important to car makers, and whether an accident was a fender-bender or a rollover is important to insurance companies.
“While telematics has been an important and growing part of our business, this divestiture allows us to focus our resources in our roadside vehicle assistance, claims management and information services which will allow us to best serve our clients and their customers in a fast-changing marketplace,” said Agero CEO Dave Ferrick in a statement.
Agero (ah-JER-oh) was born from the merger of Massachusetts-based Cross Country Automotive Services and Texas-based ATX Group in 2008. But its history goes back farther than that: Cross Country got started back in 1972, while ATX began in 1994. The overall company has 2,800 employees, most of them in Medford, and has annual revenues of roughly $500 million.