January 14, 2008 9:00 AM, EST

Buying Geologic Enables Xata to Sell to For-Hire Carriers

By Dan Leone, Staff Reporter

This story appears in the Jan. 14 print edition of Transport Topics. Click here to subscribe today.

Xata Corp.’s acquisition of fellow fleet technology provider GeoLogic Solutions gives the company its first real foothold for marketing information technology systems to for-hire trucking fleets, an executive with the Eden Prairie, Minn., firm said.

In contrast to Xata, which has served mostly private fleets since its founding in 1985, GeoLogic markets its systems almost exclusively to for-hire customers.

“We needed experience and customers in the for-hire market,” Mark Ties, Xata’s chief financial officer, told Transport Topics Jan. 7. “The Geologic transaction opened [that] market for us.”

Ties added that the trucking technology provider industry is “a fragmented market [that is] ripe for consolidation” and that Xata is still “very much in the acquisition mindset.”

Last month, Xata announced plans to buy GeoLogic for $17.5 million.

John Lewis, president of GeoLogic, agreed that there was room for consolidation among fleet technology providers.

“I think that it was clear to us that there was opportunity for — and need for — consolidation among the various players in our space,” Lewis said.

Ties said his company will leverage both GeoLogic’s technology expertise and its for-hire fleet subscriber base to expand Xata’s own footprint.

He said Xata plans to bolster some of its own systems, such as its flagship Xatanet product, using technology from GeoLogic, though he would not disclose specifics.

After the sale is completed, about 60,000 trucks will be equipped with Xata/GeoLogic onboard systems, Ties said.

Meanwhile, Lewis, who has led Herndon, Va.-based GeoLogic since private firm Platinum Equity bought it in September 2004, said he will be “staying on to help [Xata] with the transition.”

Since the Platinum purchase, Lewis said GeoLogic has whittled down its portfolio of technology offerings, eliminating some legacy systems in the process, to focus on its flagship MobileMax mobile communication system.

At the time of its purchase by Xata, GeoLogic had installed MobileMax units in about 35,000 trucks, Lewis said.

Xata estimates that private fleets run about 6.6 million of about 8.1 million commercial trucks operating in the United States, while the for-hire sector accounts for about 1.5 million vehicles.