Information & Communication Technologies

Itron Acquires Silver Spring Networks for $830 Million

by Naren Pasupalati 25 Sep 2017
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On Monday, September 18, it was announced that Itron is set to acquire Silver Spring Networks for approximately $830million. The boards of both companies have unanimously approved to the deal for which Itron has agreed to pay $16.25 per share in cash to acquire all outstanding Silver Spring shares. The acquisition is expected to close at the end of the year, or in early 2018 subject to further federal and stockholder approvals.  

With combined revenues of over $2.3billion and 90million end-point devices between them, Itron, through this acquisition, has further strengthened its leadership position in the global smart grid communications market. Landis+Gyr, Siemens, ABB and Sensus, who all hold significant market shares, will be some of the key companies Itron will be going up against.  

As highlighted by Itron, the key driving factor behind the deal focuses around Industrial IoT. As far as IoT within the electric utility space is concerned, applications such as AMI, Distribution and Substation Automation present the top 3 growth opportunities in the industry. Itron, with its smart meters and the OpenWay Riva communication platform, has a significant foothold in the mature AMI market. But with a growing number of distribution and substation assets going smart and being connected, there clearly is a lucrative opportunity for Itron to leverage its own expertise in smart meter and sensor technology and Silver Spring’s expertise on cloud-computing, analytics and grid management using IoT technology.  

According to Frost & Sullivan, the overall distribution and substation automation markets in the US would reach about $2.3billion and $831million respectively by 2020. More specifically, the communication market for DA and SA applications together is projected to grow to over $120million by 2020 and to $150million by 20123 with an average CAGR of 5.4%. . The mature AMI market has the potential to further grow as nearly a fourth of all electric meters installed are still non-smart. With this deal nearing completion by 2018, Itron has positioned itself well to tap into this opportunity early on.     

As far as previous acquisitions go, Itron had spent a $100million to buy Comverge, the U.S. demand response provider and Silver Spring has built its street lighting networking business by acquiring Streetlight Vision. This acquisition marks a major milestone in the Internet of Things ecosystem, as both companies focus heavily on internet-connected devices and solutions to help create highly efficient markets and deliver outcome based products and services.  

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