Echelon Sells Smart Grid Business to Austria’s S&T
Echelon sheds a multi-million smart meter empire to turn to the industrial internet of things
One month after announcing its plan to quit the smart grid to concentrate on the "industrial internet of things," Echelon (ELON) has made true on its promise. On Monday, the San Jose, Calif.-based company announced a definitive agreement to sell its Networked Energy Services business to Austrian IT services provider S&T AG for an estimated $5 million in "upfront consideration, dependent in part on the value of net assets at closing."
That's a little more than the $4.1 million in noncash impairment charges which Echelon assigned to its decision last month to stop competing for new smart meter contracts and sell its smart grid unit to the highest bidder. Echelon shares were up nearly 4 percent to $2.23 in Monday afternoon trading on the Nasdaq exchange, down from a 52-week high of $4.18.
With the purchase, S&T gains control, and responsibility, for millions of smart meters and other grid devices networked via Echelon's powerline carrier (PLC) technology, which have been primarily deployed in Italy, Scandinavia and eastern Europe. It also includes a joint venture with China's Holley Metering, as well as its roughly 700,000 smart meter deployment with Duke Energy, which has stopped using Echelon's technology for new deployments.
Echelon will now turn its full attention to "developing, marketing and selling our industry-leading, open-interoperable control networking platform for the industrial internet of things,” Echelon CEO Ron Sege said in a prepared statement. Outdoor lighting is the company's biggest existing business line on this front, but it's also branching into indoor lighting, as well as IP-enabled building automation through its legacy LonWorks business and new multi-protocol technologies.