Smart grid merger: Itron to buy Silver Spring Networks
Silver Spring has delivered more than 26.7 million network-enabled devices across five continents
Itron and Silver Spring Networks Inc. signed a definitive agreement for Itron to acquire all outstanding shares of Silver Spring for $16.25 per share in cash.
The transaction is valued at nearly $830 million, net of $118 million of Silver Spring’s cash. This represents a premium of 25 percent to Silver Spring’s closing share price on Sept. 15, 2017, the last trading day prior to the announcement of the transaction. The transaction has been unanimously approved by the boards of directors of both companies.
Headquartered in San Jose, California, Silver Spring provides Internet of Important Things connectivity platforms and solutions to utilities and cities. In 2016, Silver Spring generated revenues of $311 million with a gross margin of 44 percent 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 percent of its revenues through its primarily recurring 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.
Itron anticipates nearly $50 million in annualized cost synergies to be substantially realized within three years of completing the transaction by optimizing combined operations and expenses. The acquisition is expected to have a positive impact on Itron’s long-term growth rate, be accretive to gross margin in the first year after completing the transaction and be accretive to non-GAAP EPS and adjusted EBITDA in the second year, excluding one-time, transaction-related costs and including stock-based compensation costs that Silver Spring currently excludes from its reported non-GAAP results.