+Comment Vodafone has announced that it is going to buy the Italian machine-to-machine company Cobra, which does a brisk business in stolen vehicle tracking.
Cobra has done well out of the slip in Tracker’s market share and counts many of the major European car manufacturers – including Porsche – among its customers.
The firm started out as a car alarm business, but its main business is tracking stolen vehicles – it can tell where stolen cars are and how fast they are going. There have been minor forays into pay-as-you drive insurance.
Vodafone is already a major supplier to Cobra, and currently provides it with SIMs for pan-European coverage.
Erik Brenneis, director of M2M at Vodafone, said: “The combination of Vodafone and Cobra will create a new global provider of connected car services. We plan to invest in the business to offer our automotive and insurance customers a full range of telematics services.”
So one might imagine that a company with content information might also be on the shopping list.
The Vodafone offer is €1.49 per share in cash, valuing the entire fully diluted ordinary share capital of Cobra at €145m (about £115m). Cobra had a reported net debt of €48m as at 31 March 2014.
Despite the press release's declarations, the vertical integration shift is unusual for Vodafone and may be a sign of how things shape up in the land grab for Internet of Things business.
There is often a danger that when integrating vertically a company finds itself in competition with its customers, but in the case of stolen vehicle tracking, the two major rivals – Trackstar and Tracker – both use O2.
One automotive industry analyst we spoke to said he sees Cobra as a well-run company and although it has been touted for sale for a while, he expects it to do well.
Vodafone is unusually good at growth through acquisition, as we've seen with the slurp of Spanish broadband biz Ono and that of Cable & Wireless, but it will be interesting to see how it fares with a move outside its usual telco territory. ®