Verizon offered $60 a share in cash for Fleetmatics. The deal is expected to close in the fourth quarter of 2016.
Fleetmatics shares were up 39.20% in premarket trading on Monday, having closed 2.87% down on Friday at $42.96.
Verizon shares were recently down 0.47% in premarket trading. The shares gained 1% on Friday to close at $55.41.
The acquisition will allow the combined companies to become a leading provider of fleet and management solutions across the world, Verizon Telematics CEO Andrés Irlando said in statement.
Verizon Telematics is a subsidiary of Verizon, which offers wireless, software and hardware solutions to consumers, enterprises, automakers and dealers to "power connected-vehicle products around the world."
On July 29, Verizon Telematics completed its acquisition of Telogis, a cloud-based mobile enterprise management software company based in California.
Fleetmatics provides Web-based solutions for fleet operators. The products allow fleet managers to see where vehicles are, fuel usage, speed and mileage, helping them reduce operating costs. Fleetmatics has more than 37,000 customers and about 737,000 subscribers. The company is headquartered in Dublin, with North American headquarters in Waltham, Mass.
Chairman and CEO of Fleetmatics, Jim Travers, said in a statement, "Verizon and Fleetmatics share a vision that the SaaS-based fleet management solution market is extraordinarily large, lightly penetrated, global and fragmented which can best be attacked together with a world class product offering and the largest distribution channel in the industry."
Verizon last week announced it was buying Yahoo's core business for approximately $5 billion.