Echelon Corporation (NASDAQ:ELON), the open-interoperable control networking pioneer for the Industrial Internet of Things (IIoT), today announced that it has signed a definitive agreement to sell its Grid operations to S&T AG, a publicly traded European IT systems provider with an existing focus on smart energy products and services. The closing is conditioned upon regulatory approvals. The companies expect the deal to close by the end of the year.
“This transaction will allow us to focus fully on becoming a key enabler in the transition to the Industrial Internet of Things, with the confidence of knowing that S&T will continue to operate our grid business and support our customers, partners and sales pipeline”
“This transaction will allow us to focus fully on becoming a key enabler in the transition to the Industrial Internet of Things, with the confidence of knowing that S&T will continue to operate our grid business and support our customers, partners and sales pipeline,” said Ron Sege, chairman and CEO, Echelon Corp. “With the closing of this agreement, we can turn our attention to developing, marketing and selling our industry-leading, open-interoperable control networking platform for the IIoT — especially bringing the benefits of IP-based converged control systems to building automation, outdoor lighting and indoor lighting applications worldwide.”
“Acquiring Echelon’s grid business means an important expansion of our Smart Energy capabilities, further demonstrating our commitment to the energy market and our belief in the smart grid opportunity,” said Hannes Niederhauser, CEO of S&T. “Utilities favor end-to-end offerings from proven vendors with the experience, assets and people required to successfully deliver grid modernization solutions. We look forward to combining Echelon’s successful Networked Energy Services (NES) platform offerings with S&T’s software, system integration and project delivery capabilities, to serve smart energy customers throughout Europe and beyond.”
Under the terms of the agreement, Echelon will receive approximately $5 million in upfront consideration, dependent in part on the value of net assets at closing. After fees, expenses, and restructuring charges are considered the company expects the net benefit to be nominal. Echelon will also become a supplier of its industry-leading narrowband high-reliability power line communications chips to S&T for use in their smart meters and related products. Echelon will receive future benefits in the form of revenue from the purchase of these products, as well as rental income, and potential performance-based consideration of up to $1 million. As part of the transaction approximately 60 current Echelon employees are expected to join S&T. The acquisition is anticipated to be accomplished via a subsidiary established by S&T.
For more information, please visit: Business Wire