Proving the Business Case for the Internet of Things

Landis+Gyr to bolster smart-meter portfolio through takeovers: Reuters

Iain Morris
June 3, 2014
Smart meter manufacturer Landis+Gyr has unveiled plans to more than double revenues to $4 billion through takeover activity in response to surging global demand for smarter energy products.

In an interview with Reuters, chief operating officer Richard Mora said Landis+Gyr (Zug, Switzerland) would immediately look to buy companies that specialize in power metering and networks.

The Swiss company made $1.51 billion in revenues last year and aims to generate $4 billion in 2020 through a mixture of organic and inorganic growth.

Mora did not disclose how much Landi+Gyr intends to spend on acquisitions, but Reuters calculates that if half its planned growth came from takeovers – at a modest price/sales ratio of 1 – the company would invest more than $1 billion in takeover activity.

The company is wholly owned by Japan’s Toshiba (Tokyo), which bought it for $2.3 billion in 2011, and Mora has indicated to Reuters that Toshiba is willing to fund further expansion.

“If there is a compelling case, they are ready and willing to allow us to make the investments,” he is reported to have said.

The Reuters report comes not long after Landis+Gyr announced its takeover of PowerSense, a Danish maker of smart grid sensors, noting the sensor market is projected to grow significantly over the next decade in Europe, North America and the Asia Pacific.

Mora told Reuters the PowerSense (Holte, Denmark) takeover represented a good example of the kind of acquisitions Landis+Gyr is seeking.
“We have the market penetration,” he told Reuters. “What we are looking to buy is technology.”

Mora reckons there are about one billion electric power meters worldwide – excluding china, with 200 million in Europe, 120 million in the US, and about 90 million in Japan.

Landis+Gyr claims to serve about 30% of the global market with some 300 “metering points”, although just 25 million of those are so-called smart meters – and 23 million of the company’s smart meters are deployed in the US market.

“We are betting that smart grids will develop in Europe, the Middle East and Africa, in Asia-Pacific and in South America,” Mora is quoted as saying. “The opportunity is huge.”

Europe’s market is being driven largely by regulatory measures, with European Union directives requiring 80% of households across the region to have installed smart meters by 2020.

Berg Insight, a market-research company, reckoned penetration was about 22% at the end of last year, and said it expected it to rise to 60% by 2019.
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