• Acquisition of Luxembourg-based Actaris will create a worldwide market leader with more than 8,000 utility customers, expand Itron's product offerings and increase access to global markets for electricity, gas and water meters and automated meter reading (AMR) technology.
• Combined company revenues and EBITDA in 2006 would have exceeded $1.6 billion and $274 million on a pro forma basis, respectively.
• Acquisition expected to be 20 to 30 cents accretive to non-GAAP earnings per share in 2007;
• Acquisition is fully financed and committed to by cash on hand, credit facilities provided by UBS and a $235 million private placement of equity, completed Feb. 25.
SPOKANE, WA, Feb. 26, 2007 -- Itron Inc. announced yesterday that it has signed an agreement to acquire all of the stock and convertible bonds of Actaris Metering Systems. The purchase price is EUR 800 million plus the retirement of approximately EUR 445 million of debt, which, at an exchange rate of 1.30, totals approximately $1.6 billion. The acquisition is expected to close in the second quarter of 2007.
Actaris is a global leader in electricity, gas and water metering, primarily outside of North America. Itron is the AMR leader and foremost electricity meter supplier in North America. The combined company will be one of the largest metering companies in the world. This acquisition will allow Actaris to offer Itron's industry leading AMR and advanced metering infrastructure (AMI) technologies, software and systems expertise to customers outside of North America, and expand Actaris gas and water meter opportunities in North America.
For the twelve months ended December 31, 2006, Actaris generated revenue of approximately $1 billion and adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) of approximately $159 million.
"This acquisition, which will more than double Itron's annual revenues, brings together two industry leaders and reunites two former Schlumberger divisions," said LeRoy Nosbaum, chairman and CEO. "We have been looking for an investment that would allow Itron to bring its superior AMR technology and systems expertise to customers outside of North America. Our acquisition of Actaris is the perfect choice to combine their quality meters and established distribution channels with our expertise, which will ultimately bring more value to customers around the globe. No other meter or AMR provider offers a similar breadth and depth of solutions to their customers in the utility industry. This deal combines two companies that share a heritage, vision and passion for this industry and our combined customers."
The acquisition of Actaris will be funded by approximately $1.1 billion of fully-committed senior secured debt facilities, the net proceeds of the private placement of approximately $235 million of common stock, which was completed February 25, 2007, and cash on hand.
Based on management's expectation for closing in the second quarter, Itron expects that in 2007 the acquisition will add approximately $720 - $730 million in revenue, $0.20 - $0.30 in non-GAAP EPS and $110 - $115 million Adjusted EBITDA. These estimates are subject to financing terms and dependent on the closing date of the transaction and do not take into effect any intangible amortization expenses, in-process research and development expenses, charges related to inventory revaluation required under purchase accounting or other acquisition expenses.
"This acquisition brings together two very talented management teams, including many individuals who have worked together in previous careers with Schlumberger," said Nosbaum. "These are both well-run companies that produce the highest quality products in very efficient and productive factories around the world. Bringing these companies together unites research and development, manufacturing and business synergies that no other provider can match.
"There can be no doubt that this acquisition represents a historical turning point in the life of our company and a significant commitment on the part of our investors," commented Nosbaum. "But as I look at the strength of our businesses and cash flow, the talent of our combined management team and employee base, the synergies in our technology offerings, and the expanding opportunities in the global marketplace, I have no doubt that this is the right move -- both strategically and financially -- and the right time to take Itron to an entirely new level and drive strong future growth in our business on a global scale."
The acquisition is not subject to U.S. regulatory review. However, it will be subject to review by several regulatory bodies in countries outside the U.S., including, Ukraine, Germany, Brazil, Spain and Portugal, which require filings regardless of competitive product overlap.
Itron has received a senior secured underwritten agreement from UBS to finance the transaction. Additionally, UBS acted as exclusive financial advisor to the Company and sole placement agent for the private placement of common stock. Gibson, Dunn & Crutcher LLP and Perkins Coie LLP acted as legal advisors to Itron. Mayer, Brown, Rowe & Maw LLP acted as legal advisor to Actaris.
Actaris (www.actaris.com) is a world leader in the design and manufacture of meters and associated systems for the electricity, gas, water and heat markets, providing innovative products and systems that integrate the latest technologies to meet the evolving needs of public or private energy and water suppliers, utility services and industrial companies worldwide. Actaris is active in more than 30 countries, employs approximately 6,000 people in 60 locations and has 29 manufacturing sites worldwide. The company has a cumulative installed base of some 300 million electricity, gas and water meters throughout the world.
Itron (www.itron.com) is a leading technology provider and critical source of knowledge to the global energy and water industries. Nearly 3,000 utilities worldwide rely on Itron's award-winning technology to provide the knowledge they require to optimize the delivery and use of energy and water. Itron creates value for its clients by providing industry-leading solutions for electricity metering; meter data collection; energy information management; demand response; load forecasting, analysis and consulting services; distribution system design and optimization; web-based workforce automation; and enterprise and residential energy management.
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Also see:
-- "Itron announces $235 million private placement of equity"
-- "Itron announces partnership with Eka Systems for two-way mobile RF technology"
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