ITRON, INC. acquires Silver Spring Networks, Inc.

ITRON, INC. acquired Silver Spring Networks, Inc. for approximately $830 million (net of $118 million cash); $16.25 per share in cash, a transaction completed in January 2018, structured as all cash ($16.25/share via Ivory Merger Sub). The deal was a merger.

Silver Spring Networks, Inc. operates in Smart grid / Industrial IoT networks, is based in San Jose, California, USA (global footprint across five continents), had revenue of about $311 million (2016), with $1.2 billion of backlog and 44% gross margin. San Jose, California-based Silver Spring Networks provided Internet of Important Things connectivity platforms and solutions to utilities and cities. In 2016 it generated revenues of $311 million with a 44 percent gross margin and ended the year with $1.2 billion of backlog; more than 20 percent of revenues were recurring managed-services and SaaS. To date Silver Spring had delivered more than 26.7 million network-enabled devices across five continents.

Acquisition advances strategy to provide value-added services and outcomes-based solutions and enhances capabilities that increase efficiency for utilities, smart cities and enterprises. This transaction also increases Itron's presence in the sizable industrial IoT segment, driving higher growth with recurring revenues and enabling Itron to increase profitability beyond its mid-teens EBITDA margin target.

Recurring managed-services/SaaS revenue (over 20% of sales), a large IIoT installed base (26.7M+ devices) and $1.2B backlog directly advanced Itron's outcomes-based, recurring-revenue strategy. Approximately $50 million in annualized cost synergies expected to be substantially realized within three years; accretive to gross margin in year one and to non-GAAP EPS and adjusted EBITDA in 2019. Integrated into Itron's Networked Solutions / Industrial IoT operations