Dive Brief:
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Grid solutions provider Itron on Monday reached an agreement to acquire internet-of-things software provider Silver Spring Networks in a deal valued at about $830 million net of $118 million of Silver Spring cash.
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Itron will pay $16.25 for each outstanding Silver Spring share, representing a 25% premium to the closing price on Sept. 15. Itron expects to reap about $50 million in annualized cost synergies within three years of completing the transaction by “optimizing combined operations and expenses.”
- The transaction is expected to close in late 2017 or early 2018, subject to customary closing conditions, including regulatory approval and the approval of Silver Spring's stockholders.
Dive Insight:
The Itron-Silver Spring merger combines two rivals in the smart meter-smart grid market and puts them in closer competition with Swiss metering company Landis+Gyr.
Itron and Silver Spring say they plan to target the growing market for connected devices that can include utility grid sensors, to solar inverters and electric-vehicle chargers.
“The addition of Silver Spring brings more capabilities to our offerings and advances our strategy of delivering highly secure, value-generating solutions for the critical infrastructure within utilities, smart cities and the broader industrial [internet of things] sector,” Philip Mezey, Itron's president and CEO, said in a statement.
Mezey expects the transaction will increase Itron’s presence in the industrial IoT market and drive growth with recurring revenues, enabling Itron to increase profitability “beyond our mid-teens EBITDA margin target.”
"Joining forces with Itron will enable us to help more utilities and cities adopt the industrial Internet, improve their performance and reliability, and better position themselves for a connected future,” Mike Bell, president and CEO of Silver Spring said in a statement.
