Boston, MA 11/05/2013 (wallstreetpr) – US based subscription fee linked radio broadcaster, Sirius XM Radio (NASDAQ:SIRI) has announced that it has completed all formalities of acquisition of a unit of Agero which dealt specifically with Connected Vehicles Services. And with this transaction complete, the business unit would be rechristened as Sirius XM Connected Vehicle Services Inc. Company’s management was quite upbeat with this development and said that absorption of this unit would catalyze the development life cycle of Sirius’s connected vehicle services providing platform.
Sirius was already a leader in providing in-car audio entertainment and data services. And with this acquisition, it will also become a complete provider of tele-matic services. Marquee names like BMW, Infiniti, Lexus, etc were also mentioned in a list of major customers for Sirius’s newly absorbed tele-matic division. Sirius had agreed to pay $530 million for this all cash deal and had made a commitment to absorb all the staff of Agero’s Unit in the deal which was first announced in August this year. Company has confirmed that all employees of Agero’s unit have been on-boarded on Sirius’s rolls.
A few weeks back, company had disappointed the street with below expectation numbers and its shares had tanked. But that seems to have provided a good entry price to investors as the numbers were poor because of one-time extraordinary expenditure. Analysts feel that company is a good long term bet and has potential to go quite up with its capable and able management and its sensible acquisition strategy. But an unnamed voice on the street is also of the view that this acquisition would not have any major effect n company’s bottom line for next few years. All new developments in automotive industry take a while to be absorbed and same would be a case with this one. Additionally, company would also have to pay salaries to its newly absorbed employees which in itself would have an overhang on the overhead expenditures.
