Toshiba expands 'smart community' with $2.3bn purchase of Landis+Gyr
In order to widen its smart grid and smart community businesses, Toshiba Corp. is planning to pay $2.3 billion for Landis+Gyr AG (Zug, Switzerland).
Established in 1896, and now with over 8,000 utility customers globally, Landis+Gyr has developed smart metering, networking and service products for the utilities industry. It has operations in 30 countries and regions across five continents. The company is owned by a private equity fund and individual shareholders. Sales in the year to the end of December 2010 were around $1,533 million and the company has around 5000 employees.
Landis+Gyr, will become as a standalone growth platform within Toshiba, will continue to hold its properties, equipment, employees and trade mark rights, and will expand and reinforce business by making use of complementary relations with Toshiba. The company will aim to expand orders received in Europe and the US, and in China, India and Brazil, which are promoting rapid modernization of social
Toshiba and Landis+Gyr will cooperate closely in developing and executing business strategies and promoting operations.
Toshiba says it plans to combine its expertise in energy management for utility companies and the corporate and consumer sectors, with Landis+Gyr’s smart metering technologies and services to provide one-stop solutions power monitoring and management, plus effective applications and services based on cloud computing technologies.
The deal sees Toshiba entering new business sectors encompassed by the smart community concept, centering on integrated energy management systems.
Upon completion of the acquisition, Toshiba believes there will be growth in its smart grid and smart community businesses to achieving net sales of 700 billion yen (about $8.5 billion) in fiscal year 2015, against current annual sales of 300 billion yen (about $3.7 billion).
Toshiba established a dedicated smart community division to promote its smart community business in October 2010 and on April 1, 2011, Toshiba established a new in-house company, the Social Infrastructure Systems Company, in an attempt to reinforce its ability to offer integrated solutions across power transmission and distribution, a broad range of social infrastructure, including railway systems, automotive systems and rechargeable batteries, and to support the smart community business.
Toshiba is already involved in a number of smart grid and smart community demonstration projects in Japan and overseas, including the US, France and India.
The acquisition is subject to regulatory approvals and other customary closing conditions.