Toshiba Corp (6502.T) announced it would acquire smart meter company Landi+Gyr AG for $2.3 billion (186.3 billion yen) including its debt.
Toshiba, which already makes consumer electronics and power generation equipment, says its "Smart Community" business is a new focus area and is determined to maximize its presence and capabilities in the business.
The combination of Landis+Gyr’s smart metering technologies and services, plus its extensive customer base, with Toshiba’s expertise in energy management for utility companies and the corporate (buildings) and consumer (homes) sectors, will allow Toshiba to provide customers with one-stop solutions for power monitoring and management, plus applications and services based on cloud computing technologies.
Toshiba says it aims to increase sales in its smart grid businesses to 700 billion yen in fiscal year 2015, against current annual sales of 300 billion yen.
Landis+Gyr, as a standalone growth platform within Toshiba, will continue to hold its properties, equipment, employees and trade mark rights. The company will aim to expand orders received in Europe and the United States, and in China, India and Brazil, which are promoting rapid modernization of social infrastructure, Toshiba said.
—As Reported on May 16—
Toshiba Corporation (6502.T) is close to making a deal to purchase Swiss smart meter company Landis+Gyr, according to Bloomberg.
The news agency cited two unnamed sources who said the transaction could be worth $2 billion.
Toshiba reportedly beat takeover bids submitted by private equity firms TPG Capital and EQT Partners.
Landis+Gyr has annual sales of more than $1.3 billion and an installed base of more than 300 million meters. The company has gone through several different owners in the past, including Siemens (NYSE: SI) and Kohlberg Kravis Roberts & Co. Currently it is owned by a group of investors that includes Bayard Capital of Australia.
In 2010, Landis+Gyr surpassed Itron (Nasdaq: ITRI) as the number one smart meter supplier to utilities in the U.S., and the firm recently announced that it has been selected to provide meters for the first phase of a major smart grid project in China.
Toshiba makes power-generating equipment as well as consumer electronics. As a result, smart meters and smart grid applications are a natural connection that would link utility and consumer revenues. Toshiba said last year it is expecting sales of 700 billion yen ($8.6 billion) from “smart grid” and “smart communications” businesses this year.
The acquisition of Landis+Gyr will immediately make Toshiba a major player in the smart grid market.
“For Japanese firms such as Toshiba, an acquisition is a quick way to expand in the smart grid-related businesses after focusing mainly on information technology operations,” Masahiko Ishino, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, told Bloomberg.