Illustration 60886103 / Kheng Ho To / Dreamstime
Illustration 60886103 Kheng Ho To / Dreamstime
60886103 / Kheng Ho To / Dreamstime
60886103 / Kheng Ho To
Electricalmarketing 2147 Utility Tower 1025

Hubbell to Acquire Aclara in $1.1 Billion Deal to Boost Smart Grid Business

Dec. 26, 2017
Aclara helps utilities predict, plan and respond to conditions, improve operational efficiency and promote resource conservation to customers.

Hubbell Inc., Shelton, CT, has entered into a definitive agreement to acquire Aclara Technologies LLC, an affiliate of Sun Capital Partners, Inc. for approximately $1.1 billion in an all-cash transaction.

The transaction is intended to strengthen and broaden Hubbell Power Systems' competitive position across utility markets. The acquisition will combine the complementary strengths of Aclara and Hubbell Power Systems, providing the opportunity to integrate Aclara's strong customer relationships and smart infrastructure solutions into the Hubbell portfolio and accelerate ongoing innovation efforts to address utility customer demand for data and integrated solutions.

The Hubbell press release announcing the acquisition said Aclara offers a comprehensive suite of solutions, including advanced metering infrastructure, meters and edge devices, software, and installation services. These products and services provide utilities visibility into their distribution networks, optimize network performance and help engage with their customers. With approximately 1,200 people working with more than 800 electric, water and gas utilities worldwide, Aclara provides actionable insights to help utilities predict, plan and respond to conditions, improve operational efficiency and promote resource conservation to customers. Aclara reported revenues of $500 million and adjusted EBITDA of $90 million for the fiscal year ended Sept.  30, 2017.

"This is an exciting transaction that is consistent with our long-standing acquisition strategy. Aclara participates in attractive markets that complement our core with high quality products and talented people."

"Together with Aclara, Hubbell will be even better positioned to serve customers through a differentiated smart grid solution and expanded portfolio. David Nord, Hubbell’s chairman, president and CEO, said in a press release. “Hubbell Power Systems has a history of successfully integrating acquisitions under Gerben Bakker's leadership, and we both look forward to welcoming our new colleagues. We have long admired the position of Aclara's businesses in the industry, and are confident that integrating Aclara's capabilities with Hubbell's will allow us to deliver increased value to customers and shareholders."

"We are delighted to join a company with Hubbell's resources, alliance relationships with major utilities, and shared commitment to quality and innovation," added Allan Connolly, president and CEO of Aclara in the press release. "Aclara appreciates the support Sun Capital provided to establish us as a world leading provider of end-to-end, smart infrastructure solutions for electric, water and gas utilities. We look forward to our future with Hubbell and all that we will achieve together."

Analyst Jeff Sprague of Vertical Research Partners told investors the financing looks favorable and pointed out in a note that Aclara is a roll-up of several assets, including the legacy GE metering business. In 2016, Aclara won a landmark deal to participate in the largest project undertaken by Con Edison, working with Silver Spring and IBM.

“This deal strengthens Hubbell’s position in what we see as a solid US T&D cycle (with a focus on D) over the next several years,” he said.

Click here for financial details of the transaction.