“Combining the advanced technology and R&D expertise and capabilities of both companies, we anticipate accelerating our delivery of innovative solutions to our customers, particularly in the area of advanced analytics,” said Decker. Beyond metering, Xylem will use Sensus’ analytics platform and communications networks to provide additional insight to customers that use various products, and could enhance the capabilities of products such as Xylem’s smart pump. Some water utilities are also responsible for electric and gas services, which can offer synergies for metering companies to serve all meters on a single network. as New York distribution utilities look to roll out smart meters, and Massachusetts utilities do the same.įor Xylem, having a metering business will allow it to serve water utilities more holistically, especially as water scarcity becomes an increasingly pressing issue worldwide. The electric metering business has been slow in recent years, particularly in North America and Europe, but is picking up somewhat in the U.S. Aclara purchased General Electric’s electric metering business in late 2015, even as GE was about to close the largest smart metering contract in years in North America with Consolidated Edison. And sometimes, even as part of a larger conglomerate, they’re still not attractive. Fair Flow (India) Private Limited - Offering Composite Digital Sensus iPerl Static Smart Water Meter by FairFlow, Packaging Type: Box, Size: 0.5 - 2 Inch in. The acquisitions began in 2011, when Toshiba paid $2.3 billion for Landis+Gyr. The past five years have shown that it is very difficult for metering companies to compete on their own. The company is poised for growth in the Asia-Pacific region in particular, driven by the growing water pump market. “Our expansive customer relationships will be able to extend the reach of Sensus’ products and technologies to new markets globally,” Patrick Decker, Xylem president and CEO, said in a statement. For Honeywell and Elster, their gas businesses were complimentary, whereas Sensus and Xylem have overlap in water markets. In 2015, the company had revenue of $3.7 billion.Īs with the Honeywell/Elster acquisition, Xylem bought Sensus to have a smart metering offering in emerging markets, as well as to provide complimentary products to other parts of the business.
Xylem operates in 150 countries providing water technologies including water pumps, treatment solutions and analytics for public, commercial and industrial, and agricultural applications. A 10.7x multiplier is not bad, but it is significantly lower than Elster's 12.6x multiplier last year, and still lower than Landis+Gyr's 11.5 multiplier.” “Having a water player pick up the firm is a bit reminiscent of the 2015 Honeywell/Elster acquistion, where Honeywell was particularly interested in Elster position in natural gas metering rather than electrical metering. It is good to see the company finally find a permanent home,” said Ben Kellison, director of grid research at GTM Research. “Sensus' private equity owners have been shopping the firm around for some time. The sale price is 10.7x Sensus’s adjusted EBITDA and Xylem expects at least $50 million in annual synergies starting in 2017. Sensus had $837 million in revenue and $159 million in EBITDA in its last fiscal year. Last year, Honeywell bought metering giant Elster for more than $5 billion from Melrose Industries. Sensus is the latest in a string of smart meter acquisitions.
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Staff resources were diverted from meter readings and billing to ongoing data and meter testing to ensure greater customer service in the future.”Ĭlick here to view the Sensus Case Study in full detail.Water treatment company Xylem agreed to pay $1.7 billion in cash to buy metering provider Sensus this week. The utility was able to save $30,000 a year by reducing non-revenue water, improving billing accuracy, and enhancing overall performance. “Since launching the new upgrades, the utility has achieved more than 99% accuracy in its meters (they discovered that ~15% of the old meters failed to provide accurate readings). The City of Fairmont completely upgraded to an AMI solution. The process of manually reading over 14,500 meters and managing customer billing became inefficient. Keeping non-revenue water to a minimum while ensuring the best possible service to its customers became challenging for the City’s water utility. These types of water connections complicate monitoring customer water usage and inactive accounts. West Virginia utility reduces non-revenue water by 25 million gallons per year.Ĭity of Fairmont, West Virginia, April 2018 – The City of Fairmont, like most college towns, has many rental properties and apartments with high residential turnover.