Itron Inc, which makes technology to monitor energy and water usage, said it would buy Silver Spring Networks Inc., in a deal valued at about $830 million, to expand its presence in the smart city and smart grid markets.
Silver Spring’s network equipment and services help transform power grid infrastructure into a smart grid, helping in efficient management of energy. Itron said it will use Silver Spring’s footprint in the smart utility and smart city sectors to earn recurring revenue in the high-growth software and services segment.
Itron said it planned to finance the deal, which is expected to close in late 2017 or early 2018, through a combination of cash and about $750 million in new debt. The deal value of $830 million excludes $118 million of Silver Spring’s cash, the companies said.
The combined companies are expected to target smart city deployments as well as smart grid technology. Under the terms of the deal, Itron will acquire Silver Spring for $16.25 a share in cash. The price tag is a 25-percent premium to Silver Spring’s closing price on Friday. Silver Spring offers Internet of Things platforms for utilities and cities. The company has about $311 million in annual revenue. Silver Spring connects 26.7 million smart devices and manages them through a Software-as-a-Service (SaaS) platform. For instance, Silver Spring offers a wireless smart street lighting platform as well as services for other end points.