Swiss electrical conglomerate Landis+Gyr has signed a definitive agreement to acquire GRIDiant, a utility analytics business focused on the electricity grid. No price has been disclosed. Landis+Gyr said the deal will expand its software analytics portfolio, enhance its end-to-end solutions capability and firmly emphasizes its ‘commitment to becoming a global leader in smart grid technologies and products.’
Landis+Gyr was bought by Toshiba in 2011 for $2.3 billion (1.5 times Landis+Gyr’s sales figures). Since then, it has been run independently of the corporation. It supplies gas and electricity meters, as well as the communication network infrastructure that backhauls their data to the utility, including GSM, GPRS, M-bus and Ethernet. Landis+Gyr claims a global market share of around 30% with 300 million metering points (25 million of which are smart meters).
We don’t want to sound like a broken record or a parrot echoing the industry buzzwords, but there is a tremendous amount of value to be found in big data, once it is pulled from the ether. The popularity and growth of Big Data in recent years has shown that there is a large market for companies who specialize in collating and presenting data to businesses looking for insight into where they might improve efficiency or save money in their operations.
Network architectures as complex as the electricity grid can often be very wasteful and inefficient, with problems going unnoticed for long periods of time. A system that monitors and collects data from both the core network and the edges of the grid can allow operators and utilities to address issues far more quickly than they could if they were relying on manual inspections. The data collected also allows them to make business decisions based on pattern analysis and consumer demands that might not be obvious without a software platform in place.
This deal looks like a sensible move for Landis+Gyr, which said ‘advanced grid analytics enable utilities to extract business value from large data sets, as smart meters and other grid devices provide more timely and in-depth information about their distribution networks. GRIDiant’s proven analytics suite will be integrated into Landis+Gyr’s advance metering infrastructure (AMI), distribution grid management and cloud-based solutions for utility customers.’
Andreas Umbach, Landis+Gyr CEO, said ‘the insights gained from analytic tools are essential ingredients in leveraging the value from smart grid infrastructure investments, and that these insights can promote operational efficiency throughout the distribution grid.’
‘Our work with Landis+Gyr as a partner has been positive and we are pleased that our relationship is moving into a full ownership model,’ said Soorya Kuloor, the GRIDiant CTO. ‘This transaction is wonderful news for our employees and customers as we will now become a key element in the solution offering for a leading smart grid and grid management company.’
In May, Landis+Gyr announced that it sought to double its revenue to $4 billion on the back of global investments in smart metering. COO Richard Mora said that ‘we aspire to be a company with $4 billion in revenue by 2020 and we will be doing this through organic growth and acquisitions.’ He added that Toshiba was willing to fund this expansion. The first major acquisition of its strategy was PowerSense, a Danish smart grid sensor and monitoring company, for an undisclosed amount.
Mora noted that there were 1 billion electric power meters in the world excluding China (where foreign companies frequently lose out to state-owned businesses), with 200 million in Europe, 120 million in the USA and 90 million in Japan. Landis+Gyr would like to add more to its 300 million share of the market, and sees expansion in the EU as a key driver, where an EU directive requires 80% of homes to have smart meters installed by 2020 ‘ to the tune of around $21.8 billion in spending. Other key areas of growth identified by Mora include the rest of the EMEA, Asia-Pacific and Latin America.