Telecom giant Verizon Communications Inc. (NYSE: VZ – $54.24) announced it has signed an agreement to buy Telogis, Inc., a private company based in Aliso Viejo, California. Telogis provides businesses location technology integration, information and related services. The acquisition adds Software-as-a-Service technology and services in the connected vehicle and mobile enterprise management sectors to Verizon’s Telematics subsidiary, which provides customers with solutions in the connected vehicle space. Telematics operates in more than 40 markets worldwide and offers comprehensive services to consumers, enterprises, automakers and dealers, providing technological and service expertise to power connected-vehicle products around the world. Terms of the transaction have not been disclosed and the acquisition – subject to customary regulatory approvals – is expected to close in the second half of 2016.
Verizon’s already strong balance sheet has improved of late. Notably, the company ended the March quarter with just over $5.8 billion in cash on its ledger, up from about $4.4 billion a year ago. What’s more, long-term debt at the end of the period was down about $5 billion, relative to the year-earlier figure. I believe positions in high-quality Verizon shares will offer worthwhile capital appreciation potential over the coming 3 to 5 years. In addition, income-seeking types are likely to find VZ’s dividend yield (4.2%) appealing, as it is currently almost double that of most equities and a boost in the third quarter is likely.