Xylem to buy smart meter maker Sensus USA for $1.7 bn

US water technology company Xylem Inc yesterday struck a deal to buy Sensus USA Inc, a provider of advanced metering technologies to utilities from buyout firm Jordan Company and Goldman Sachs Group, for around $1.7 billion in cash.

Jordan Company and Goldman Sachs private equity arm had acquired Sensus in 2003 for $650 million.

Xylem intends to fund the deal with about $400 million of its non-US cash, new and existing credit facilities, and a combination of short-and long-term debt.

It expects to achieve at least $50 million in annual cost synergies within three years of the deal closing.

North Carolina-based Sensus is a provider of smart meters, network technologies, and advanced data analytics services for the water, electric and gas industries.

It has more than 80 million metering devices installed globally, and its distinctive FlexNet communications network technology uses licensed spectrum in the US and other geographies and provides secure connectivity solutions that support multiple applications.
Sensus generates nearly 70 per cent of its $837 million annual revenues in the US.

It has 3,300 employees and operates in the US, the UK, Germany, Slovakia, and China.

The acquisition would make Xylem a major player in the market for smart meters, at a time when regulatory requirements and a drive for savings are pushing both companies and consumers to control their water and energy consumption more tightly.

With Sensus, we will acquire a strategically valuable asset that will accelerate our ability to bring systems intelligence solutions to customers across the water and energy industries, establish a foundation for future growth and create significant shareholder value,'' said Patrick Decker, Xylem president and CEO.

Xylem is a global water technology provider, enabling customers to transport, treat, test and efficiently use water in public utility, residential and commercial building services, industrial and agricultural settings.

The New York-based company operates in more than 150 countries and reported 2015 revenue of $3.7 billion.