May 19, 2016 / 6:30 PM / 3 years ago

Exclusive: Smart meter company Sensus explores sale - sources

(Reuters) - Sensus USA Inc is exploring a sale that could value the private equity-owned provider of advanced metering technologies to utilities at as much as $1.7 billion, including debt, according to four people familiar with the matter.

A sign is displayed in the reception of the Sydney offices of Goldman Sachs in Australia, May 18, 2016. REUTERS/David Gray - RTSERK5

The Jordan Company LP, the buyout firm that controls Sensus, is working with Goldman Sachs Group Inc (GS.N) and Credit Suisse Group AG (CSGN.S) on an auction for the company, the people said this week.

Sensus has annual earnings before interest, taxes, depreciation and amortization (EBITDA) of more than $150 million, the people added, asking not to be identified because the sale process is confidential.

The Jordan Company, Goldman Sachs and Credit Suisse declined to comment, while Sensus did not respond to a request for comment.

The sale process comes as smart metering companies become coveted assets amid regulatory and financial pressure to increase energy efficiency.

In January, Honeywell International Inc (HON.N) completed the acquisition of the utility consumption metering business of Britain’s Melrose Industries Plc (MRON.L) called Elster for $5.1 billion.

Headquartered in Raleigh, North Carolina, Sensus is a supplier of smart metering and related communications systems to the global water, gas, heat and electric utility sectors. It had revenue in 2015 of $850 million, according to credit ratings agency Moody’s Investors Service Inc.

Sensus is one of the longest held investments in the history of private equity. The Jordan Company, in partnership with Goldman’s buyout arm, acquired the company for $650 million in 2003. Goldman’s private equity business still owns 34 percent of Sensus, with the Jordan Company owning the remainder.

The shareholders were holding on to the company because they were waiting for its financial performance to improve, so it can fetch a high valuation in a sale.

Sensus’ financial metrics have steadily improved since bottoming three years ago, driven by stronger end-market demand and comprehensive cost-cutting initiatives, Moody’s said earlier this month.

New product launches, combined with the company’s restructuring efforts, should benefit operating results over the medium term, Moody’s added.

Reporting by Greg Roumeliotis in New York; Editing by Cynthia Osterman

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