Summit News

Silver Spring Networks considering IPO

SAN FRANCISCO (Reuters) - Privately-held smart grid networking company Silver Springs Network is considering launching an initial public offering but will not do so this year, Chief Executive Scott Lang said on Tuesday.

Silver Spring Networks CEO Scott Lang listens to a question during the Reuters Global Climate and Alternative Energy Summit in San Francisco, California September 8, 2009. REUTERS/Robert Galbraith

Tapping the public markets is an option for Silver Spring and everything the company was doing was to “build a long term sustainable great investment for shareholders,” Lang told the Reuters Global Climate and Alternative Energy Summit in San Francisco.

“That will be an option that will be at our doorstep,” he said, adding that the company is well capitalized with a strong balance sheet and little debt with a revenue run rate of over $100 million this year.

Lang said the IPO will definitely not be launched this year but declined to comment on whether it will happen in 2010.

The Redwood City, Calif.-based startup, which has raised about $170 million so far, has attracted investments from technology heavyweights such as Google Inc.

Utility companies around the world are laying the groundwork to upgrade their network with smart grid technology, which measures and modifies power usage in homes and businesses, improving grid reliability.

Experts envision the smart grid as a network that will wring new efficiencies out of thousands of miles of power lines and open the door to more development of renewable electricity sources.

Silver Spring isn’t looking to be bought, Lang said, addressing speculation that network equipment maker Cisco Systems Inc was interested in Silver Spring.

“I have an enormous amount of respect for John Chambers,” Lang said, referring to the chief executive officer of Cisco. “It’s never been a conversation that he and I have had. It’s never been a conversation at my board.

“Our focus is really to go build our own firm, not to be picked up by someone else, so to speak,” Lang said.

Silver Spring provides the hardware, software and services that allow power utilities to run smart grids.

The company has contracts with power utilities that serve 25 percent of the U.S. population, including Pacific Gas & Electric, and Florida Power & Light.

Lang said he expect 2010 to be a “very strong” year for booking orders, mainly because of the U.S. government stimulus flowing into the green technology sector.

“I think 2009 was a good booking year. But I think 2010 should be even stronger,” he said, adding that the company is looking to add about 200 employees in the next nine months.

Silver Spring currently has nearly 500 employees.

In wide-ranging remarks, Lang said the company is in an acquisition mode and is looking to buy companies that have technologies that would help Silver Spring gain a foothold in markets like Europe.

“There are a number of companies that are out there that would accelerate our entry into new markets,” he said. “We will have an acquisition strategy that will round out our portfolio.”

Reporting by Poornima Gupta; editing by Carol Bishopric