Itron to buy Silver Spring to boost smart grid presence

FILE PHOTO: A trader gestures while waiting for Silver Spring Networks to begin trading on the floor at the New York Stock Exchange, March 13, 2013. REUTERS/Brendan McDermid

(Reuters) - Itron Inc ITRI.O, which makes technology to monitor energy and water usage, said it would buy Silver Spring Networks Inc SSNI.N in a deal valued at about $830 million, to expand its presence in the smart city and smart grid markets.

Silver Spring shareholders will receive $16.25 per share in cash, a premium of 25 percent to the stock’s Friday close. The company’s shares were trading at $16 before the bell on Monday.

Silver Spring’s network equipment and services help transform power grid infrastructure into a smart grid, helping in efficient management of energy.

Itron said it will use Silver Spring’s footprint in the smart utility and smart city sectors to earn recurring revenue in the high-growth software and services segment.

Itron said it planned to finance the deal, which is expected to close in late 2017 or early 2018, through a combination of cash and about $750 million in new debt.

The deal value of $830 million excludes $118 million of Silver Spring’s cash, the companies said.

Centerview Partners and Credit Suisse are the financial advisers to Itron, while Evercore is the financial adviser to Silver Spring.

Jones Day provided legal counsel to Itron and Fenwick & West LLP to Silver Spring.

Reporting by Aishwarya Venugopal and Arjun Panchadar in Bengaluru; Editing by Anil D’Silva and Sriraj Kalluvila