Verizon's acquisition of Telogis would create the second-largest telematics company in the U.S. in a deal that brings together complementary businesses, a leading telematics consultant said.

Once combined, Verizon and Telogis would be second to Fleetmatics in number of units under management in the U.S. market. The companies would each have more than 700,000 units in service. Globally, the combined entity would be third behind Fleetmatics and TomTom Telematics, according to Clem Driscoll, who produces an annual market study.

The deal brings Verizon a telematics company in Telogis that has developed partnerships with Ford, General Motors, Hino, Isuzu, Mack, and Volvo's Class 8 truck unit. Verizon Telematics has focused more on building a subscriber list for its Web-based Networkfleet software service, Driscoll said.

"To me it’s a statement by Verizon that they want to get deeper into GPS fleet management or more broadly they want to get deeper into M2M (machine-to-machine) data services," Driscoll said. "They have aggressively built a subscriber base for Verizon Networkfleet. That business has been growing at a fast rate. It's leveraged mostly by the Verizon B2B salesforce, which has been feeding a lot of leads into Networkfleet and helping them grow."

Telogis has been in the top 10 of telematics providers listed in Driscoll's study, and the company brought in about $89 million in revenue in 2014. The company's revenue surpassed $100 million in 2015, said Krys Grondorf, a Telogis spokesperson. The sales price for the deal would likely fall in the $350 million to $400 million range, Driscoll said.

Both companies primarily offer Software-as-a-Service (SaaS) and contract out to third-party manufacturers to provide the black-box hardware that pulls telematics data from a vehicle's electronic data bus.

The merger may signal future consolidation in the telematics industry, which now counts several hundred vendors, according to LeasePlan USA's Dan Shive, vice president of risk management services.

"This acquisition is further confirmation that telematics is becoming a must-have technology for effective fleet management today," Shive said. "It is also a sign of expected vendor consolidation in a maturing marketplace. Telematics has grown exponentially in recent years with scores of providers, many of which were funded by venture capital investment. They are now looking for long term strategic partnerships to remain viable."

The deal is expected to close in the second half of 2016, once Verizon obtains approval from the Federal Trade Commission under anti-trust laws.

For more information about Driscoll's 2016-2017 U.S. Mobile Resource Management Systems Market Study, click here.

Editor's note: This story was updated on June 23 with Telogis' response.