Toshiba to buy Landis+Gyr for $2.3 billion
Landis+Gyr, the Swiss-based company with a facility in Pequot Lakes, is being sold to Tokyo-based Toshiba for $2.3 billion in cash, it was learned Thursday.
Landis+Gyr employs about 190 people in the 47,000-square-foot Pequot Lakes facility.
Calls for comment from the Pequot Lakes’ office were referred to the company’s New York office.
“It’s not going to change anything,” said Thor Valdmanis, spokesman with Landis+Gyr, in response to a question Thursday about the future of the Pequot Lakes facility. No name change is planned. The company reports there are no plans for job reductions or restructuring because of the transaction.
The sale is a blending of global companies.
“Toshiba is a consumer electronics giant with the vision and determination to build next generation smart communities, complete with smart homes and smart appliances,” Valdmanis stated in an email. “Landis+Gyr is the global leader in smart meter solutions that help consumers manage energy better. The marriage will bring many, many benefits.”
Landis+Gyr was preparing to list on the public stock exchange, perhaps in the U.S. or Europe when it received attractive purchase offers from a half-dozen companies and private equity firms, Valdmanis said. He said the Toshiba offer was extremely attractive given its reputation for innovation, a strong balance sheet and determination to keep Landis+Gyr as a stand-alone growth platform.
“There will be no impact on Landis+Gyr operations anywhere, including Pequot Lakes,” Valdmanis said. “Nothing changes for local employees under this deal other than possible expanded long-term personal and professional opportunities of part of an even larger global company.”
Valdmanis said Toshiba is buying Landis+Gyr to more quickly deliver on a collective Smart Grid vision.
“As such, there are no plans for restructuring associated with this transaction,” Valdmanis stated.
Andreas Umbach will lead Landis+Gyr as president and CEO within Toshiba’s Infrastructure Systems Group.
“We welcome Landis+Gyr, the world leader in smart metering products and services, to the Toshiba family,” said Hideo Kitamura, Toshiba’s corporate executive vice president, in a news release.
“Our intent is to become a global leader in the Smart Community business by 2020,” Kitamura said. “Together with Landis+Gyr, we will accelerate the development of our combined product and service portfolio to empower utilities and their end customers and to provide sophisticated Smart Community solutions in the global market.”
The sale agreement has Toshiba buying the entire equity of Landis+Gyr, which provides energy management solutions for utilities.
Toshiba stated the Smart Grid market is expected to grow $71 billion in the next decade, noting the trend to shift to Smart Community, supporting energy, water, transportation as part of a modernization of infrastructure supporting towns and cities.
Landis+Gyr employs 5,000 people and the company’s latest 12-month revenue through March was $1.59 billion. Landis+Gyr has more than 8,000 utility customers globally. Toshiba was founded in 1875, now operates in more than 490 companies and has 203,000 employees worldwide. Annual Toshiba sales surpass $77 billion.
Toshiba reported the benefit of the acquisition follows projects to establish Smart Grids around the world to achieve modern and environmentally friendly infrastructure essential for a low carbon society and sustained economic growth.
This sale won’t be the first global shift for the business.
Landis+Gyr began in the lakes area as Hunt Technologies, which was started in Lynn and Paul Hunt’s Brainerd home in the mid 1980s and moved to Pequot Lakes in 1994.
The Hunts developed a remote way to read electric meters. The technology developed by Hunt, called the Turtle, offered one-way communication from the meter to the utility office. In 1994, Hunt Technologies launched the first power line carrier-based automatic meter reading system to be broadly used by electric utilities.
In 2000, Hunt Technologies experienced a critical cash flow problem and significant job cuts. A combination of factors was credited with the cash flow crisis, including the company’s own rapid growth and a market slowdown helped by Y2K concerns, issues expected with the date change from 1999 to 2000.
Faced with difficulties, Hunt Technologies executives announced they were looking for outside help. Crow Wing Power, headquartered north of Brainerd, acquired a majority interest in Hunt and signed a management agreement in 2000. The following year the company reported a rebound.
Six years later, the company was sold to the Bayard Group, which consolidated all of its subsidiaries beneath the Landis+Gyr name. In 2008, Hunt Technologies began operating under the Landis+Gyr brand.
Landis+Gyr developed and engineered the next generation of that communication technology, called Gridstream, which offers two-way communication to provide a utility with information on electric customer usage, as well as the ability for a utility to control the meter and devices such as load control switches and smart thermostats.
The technology also allows homeowners the ability to monitor current and historical usage, and the best times to run certain appliances.
Operating in more than 30 countries, the Zug, Switzerland-based Landis+Gyr did about $1.4 billion in sales in 2009. In North America, the company had about $600 million in sales in 2009, more than 50 percent ahead of 2008’s sales.
Landis+Gyr has been involved in electricity meters since its origins in 1896 and its first overseas office was in New York in 1924. Now the company reports it serves all the major utilities on every continent. Last summer, Landis+Gyr reported it sold products and services to more than 520 utilities.
Major shareholders of the selling Landis+Gyr investor group include interests associated with Allianz Capital Partners, Australian Capital Equity, DLJ Merchant Banking Partners, Dubai International Capital, Marinya Holdings, Sir Douglas Myers, Sir Anthony O’Reilly, Propel Investments, and Sofina SA, Landis+Gyr reported, adding Credit Suisse and Lazard led the sale process of Landis+Gyr to Toshiba. Deutsche Bank and Goldman Sachs co-advised Landis+Gyr shareholders on liquidity alternatives, the company reported.
The sale is subject to regulatory approval. Toshiba announced the acquisition, valued at $2.3 billion, includes net debt.
The acquisition is expected to close in the third quarter.
RENEE RICHARDSON may be reached at email@example.com or 855-5852.