Verizon is strengthening its Internet of Things (IoT) business by purchasing fleet management software firm Fleetmatics for $2.4 billion in cash.

Fleetmatics’ software-as-a-service (SaaS) platform will become part of Verizon Telematics, a Verizon subsidiary, as will its more than more than 37,000 customers and 737,000 subscribers to Verizon’s IoT network.

Fleetmatics is headquartered in Dublin, Ireland, and has offices in Waltham, Massachusetts, which is also home to one of Verizon’s Innovation Centers.

The Fleetmatics acquisition is expected to close in the fourth quarter.

The $2.4 billion deal is valued at $60 per share, which represents a 40 percent increase over Fleetmatics' closing price of $42.96 last Friday. Shares of Fleetmatics rose to $59.66 on news of the deal.

Verizon appears to be growing its IoT business through acquisitions. In June, the company purchased Telogis, a global, cloud-based mobile enterprise management software company based in Aliso Viejo, California. That deal closed last week.

IoT analyst firm MachNation believes that Verizon is purchasing Fleetmatics for its customer base rather than its technology. “We anticipate Verizon will use some pieces of Fleetmatics’ technology and combine it with Verizon’s other telematics technology offerings from Telogis and Hughes Telematics,” MachNation said in a research note. “This acquisition of Fleetmatics is set to offer small and medium businesses (SMBs) the same quality of integrated fleet and workforce management solutions as large enterprises.”

At the end of second quarter, Verizon reported IoT revenues of $205 million, a year-over-year increase of about 25 percent.