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Itron, which focuses on energy and water analytics and technology, said it will acquire Silver Sprint Networks, an Internet of Things and smart city player, in a deal valued at $830 million.
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.
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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.
Itron said it will save about $50 million in annual costs once the deal is complete. Itron also said Silver Spring will add to earnings in the second year after the deal closes and boost growth.
Philip Mezey, Itron CEO, said the combination of the companies technologies will boost analytics, device optimization, and networking tools. On a conference call, Mezey noted that the combined company sees a "growing and emerging opportunity." In addition, the open standards approaches from both companies means integration and joint products will be easier to launch.
Here's the landscape and Itron and Silver Spring stack:
The combined company will have more than 90 million smart end points in the field. Itron said the Silver Spring purchase will close in late 2017 or early 2018.