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Pointer Telocation Ltd. (NASDAQ/TASE: PNTR) agreed to acquire Brazilian fleet management company Cielo Telecom, for $6.5 million. Cielo, founded in 1994, operates a fleet of 16,000 trucks in southern Brazil, with a comprehensive set of telematics software and application tools for vehicle monitoring, driver behavior management, time management, including blocking, tracking and telemetry devices and various actuators for vehicle security and driver control. Cielo also provides a round-the-clock support center and vehicle recovery service. The move comes less than a month after Verizon Communications Inc. (NYSE: VZ) agreed to acquire Fleetmatics Group PLC (NYSE: FLTX), a leading global provider of fleet and mobile workforce management solutions, for $2.4 billion, intended to bolster Verizon’s position as a leading provider of next generation connected vehicle services. In February 2016, wireless communications solutions provider CalAmp Corp. (NASDAQ: CAMP) agreed to acquire vehicle theft recovery systems provider LoJack Corp. (NASDAQ: LOJN) for $134 million, to create a leader in connected car solutions and vehicle telematics applications. Last year, Israeli-American telematics startup GreenRoad, a leading Silicon Valley headquartered SaaS driver behavior and fleet performance service provider, raised a $26 million Series G round led by Israel Growth Partners, with participation from existing investors Amadeus Capital Partners, Benchmark Capital, DAG Ventures, Al Gore’s Generation Investment Management, and Richard Branson’s Virgin Green Fund. The round brought the startup’s total funding to nearly $100 million. Pointer Telocation is a leading provider of telematics technology and services to the automotive and insurance industries, including fleet management, mobile asset management, stolen vehicle recovery, vehicle diagnosis and Internet of Things solutions. The company has a growing list of customers and products installed in 50 countries. The company’s Cellocator is a leading automatic vehicle location (AVL) solutions provider for stolen vehicle retrieval, fleet management, car & driver safety, public safety, and vehicle security. “This acquisition will expand our customer base and enable us to better penetrate the southern part of Brazil and participate actively in the truck segment of fleet management,” said Pointer chief executive David Mahlab. “Given our existing infrastructure in Brazil, we see strong synergistic potential from the combination of the newly acquired business with ours, and we expect the acquisition to be accretive as of the first day.” “We expect this acquisition to position us as one of the leading fleet management companies in Brazil,” he added. Following our acquisition in South Africa two years ago, this is another step in the execution of our global expansion strategy; a strategy that combines organic growth and M&A, which aims at positioning Pointer as one of the global leaders in MRM and fleet management.” Pointer was recently contracted by the Rio de Janeiro Transit Authority to provide technology and integration services during the 2016 Olympic Games, managing the vehicles and personnel responsible for transit control, emergency and contingencies. Over 200 vehicles were monitored by Pointer in real time throughout the Games. The system relied on Pointer’s Web Fleet software platform and was integrated into the city’s CET Control and COR Operation Center, providing a unified view of traffic information throughout Rio de Janeiro. Pointer has a market capitalization of $57.5 million. On June 8, 2016 Pointer spun off its Israeli subsidiary, Shagrir Group Vehicle Services Ltd., through which Pointer carried out its road side assistance (RSA) activities and listed Shagrir’s shares for trade on the Tel Aviv Stock Exchange. Pointer’s revenues for the second quarter of 2016 increased 4.6% to $16.2 million as compared to $15.5 million in the second quarter of 2015. In local currency terms, revenues increased by 15%. Gross profit was $7.7 million (47.7% of revenues) compared to $7.2 million (46.7% of revenues) in the second quarter of 2015. Adjusted EBITDA from continuing operations was $2.3 million compared with $2.1 million in the second quarter of 2015, an increase of 9%. The Global Commercial Telematics Market The SaaS-based fleet management solution market is extraordinarily large, lightly penetrated, global and fragmented. Telematics are an interdisciplinary field encompassing telecommunications, vehicular technologies, road transportation, road safety, electrical engineering, and computer science. Vehicle telematics solutions provide fleet operators with visibility into vehicle location, fuel usage, speed and mileage, and other insights into their mobile workforce, helping them to reduce operating costs, as well as increase revenue. The global telematics market is poised to grow exponentially in the future, with approximately 104 million new cars expected to have some form of connectivity by 2025, according to EY. No single player holds a dominant position in the telematics market yet, and we believe no one will ever own it alone. The development of most of these services will force every major player to work outside its core competency, notes EY. According to a new report by MarketIntelReports entitled World Commercial Telematics Market, the global commercial telematics market is expected to reach $49.12 billion by 2020, at an estimated CAGR of 18.4 % during the forecast period (2014 – 2020). The global commercial telematics market is driven by increased market penetration of smart phones, lowered connectivity cost, availability of high speed internet technologies such as LTE, greater governmental mandate in terms of safety compliance mandates, road infrastructure constraints, and driver monitoring. The commercial telematics market has been a growing trend since the past decade as a result of the decreasing costs of connectivity throughout the globe. Furthermore, with the development of technologies such as VoIP, LTE and others, the telematics market is expected to growth in the coming years. Market research firm MarketsandMarkets forecasts the global commercial telematics market to grow from $20.02 billion in 2015 to $47.58 billion by 2020.  ]]>