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Illustration 60886103 / Kheng Ho To / Dreamstime
Illustration 60886103 Kheng Ho To / Dreamstime
60886103 / Kheng Ho To / Dreamstime
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Itron to Acquire Silver Spring Networks

Sept. 20, 2017
Itron envisions it will converge the best of both companies’ complementary technologies to provide streamlined solutions on standards-based platforms

Two of the biggest players in smart metering and smart city systems will be joining forces in a deal where Itron, Inc., Liberty Lake, WA, acquires Silver Spring Networks, Inc., San Jose, CA, in a transaction valued at approximately $830 million.

In the deal, which has been unanimously approved by the boards of directors of both companies, Itron will buy all outstanding shares of Silver Spring at $16.25 per share in cash, a premium of 25% to Silver Spring’s closing share price on Sept. 15, 2017, the last trading day prior to the announcement of the transaction. Itron will pay for it with cash and $750 in incremental new debt, with underwriting from Wells Fargo and financial advice from Centerview Partners and Credit Suisse. Silver Spring is advised by Evercore.

“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 IoT sector,” said Philip Mezey, Itron’s president and chief executive officer. “By converging our complementary, standards-based technologies, we will enhance customer efficiencies with solutions that optimize devices, network technologies, outcomes and analytics. This enables us to increase investment in new solutions and accelerate innovation for our combined customer base, covering more than 200 million people.”

In 2016, Silver Spring generated revenues of $311 million with a gross margin of 44% and ended the year with $1.2 billion of backlog. With its global footprint in the smart utility and smart city sectors, Silver Spring generated more than 20% of its revenues through its managed services and SaaS solutions, an area of strategic focus for Itron. To date, Silver Spring has delivered more than 26.7 million network-enabled devices across five continents, the release said.

Itron anticipates approximately $50 million in annualized cost synergies over the first three years after the acquisition by optimizing combined operations and expenses.