Water technology company Xylem is diving into the growing market for smart meters by acquiring Sensus USA for about $1.7 billion.
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Randy Bays, president of Sensus, said: “Xylem is a highly respected company and we are confident that, together, we will have the resources and scale to continue advancing differentiated technology and delivering innovative solutions to our customers around the world”.
This is a massive acquisition for Xylem after a series of much smaller acquisitions in the water tech sector that began in 2013, and continued previous year and through this February. BlackRock Institutional Trust Company N.A. boosted its position in Xylem by 8.6% in the first quarter.
Xylem has been an active buyer in the water tech sector. Last Year, Xylem spent $18 million to acquire Hypack, a Middletown, CT-based company that provides software used to survey water resources.
The all-cash deal – the latest in a recent string of billion-dollar acquisitions throughout the tech industry – will bolster Xylem’s capabilities in smart meters, network technologies and analytics for the water, electric and gas industries. It offers Chinese language search platform on its Baidu.com Website that enables users to find relevant information online, counting Web pages, news, images, documents, and multimedia files through links offered on its Website; and transaction platform, counting Nuomi.com to connect online and offline services offered by third-parties.
The $1.7 billion cash purchase price is more than ten times Sensus’ 2016 adjusted EBITDA (adjusted earnings before interest, taxes, depreciation and amortization) of $159 million. Xylem expects the combination of the two companies will lead to $50 million in annual cost savings, and possibly more as the two product lines work together.
Sensus has more than 80 million metering devices installed globally, serving an advanced metering infrastructure (AMI) segment that, according to Xylem, is growing at almost twice the rate of the total metering space.
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Pending regulatory review, the transaction is expected to close in the fourth quarter of 2016. Our expansive customer relationships will be able to extend the reach of Sensus’ products and technologies to new markets globally, particularly in emerging markets.
