NEW YORK (TheStreet) -- Shares of Fleetmatics (FLTX) are surging 38.64% to $59.56 on heavy trading volume early Monday afternoon after Verizon Communications (VZ) said it would buy the company for about $2.4 billion.
Verizon offered to pay $60 per share for the Waltham, MA-based provider of mobile workforce solutions.
"The powerful combination of products and services, software platforms, robust customer bases, domain expertise and experience, and talented and passionate teams among Fleetmatics...will position the combined companies to become a leading provider of fleet and mobile workforce management solutions globally," CEO of Verizon Telematics Andrés Irlando said in a statement.
Verizon Telematics is a subsidiary of Verizon that offers wireless, software and hardware solutions to consumers, enterprises, automakers and dealers.
The transaction is expected to close in the fourth quarter.
Fleetmatics stock was downgraded to "hold" from "buy" at Stifel following the announcement of the deal, the Fly reports. The stock was also cut to "market perform" from "outperform" at William Blair and to "sector perform" from "outperform" at RBC Capital.
About 8.29 million of Fleetmatics' shares were traded so far today vs. its average volume of 392,195 shares per day.
Shares of Verizon are down 0.97% to $54.87 early this afternoon.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C+ on Fleetmatics stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels.
But the team also finds weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: FLTX