Xylem Buys MSP Sensus in $1.7 Billion IoT Play

Xylem Inc., a leader in global water technology, announced today that it has signed an agreement to acquire Sensus, a leading provider of smart meters, network solutions and advanced data analytics for water, electric and gas industries, for approximately $1.7 billion in cash, according to a joint statement.

The deal will move Xylem into the business of real-time monitoring of water and energy consumption.

Sensus, with product offerings in communication, metrology and software, has more than 80 million smart meters installed globally and utilizes a FlexNet® communications network technology, expected to support many of Xylem’s connected product offerings and enable its expansion into adjacent Internet of Things markets.

Sensus is well positioned in the advanced metering infrastructure (AMI) segment, said Patrick Decker, Xylem President and CEO.

With this acquisition, Xylem, a premium water and wastewater applications solutions company with a portfolio of products and services that address the cycle of water from collection, distribution and use, to its return to the environment, will acquire a strategically valuable asset that will accelerate its ability to bring systems intelligence solutions to customers across the water and energy industries, said Decker.

Sensus has close to 3,300 employees and major locations in the US, UK, Germany, Slovakia and China. The company reports $837 million in adjusted revenue in fiscal 2016.

The $1.7 billion cash purchase price is more than ten times Sensus’ 2016 adjusted EBITDA (adjusted earnings before interest, taxes, depreciation and amortization) of $159 million.

Xylem, based in Rye Brook, NY, reported 2015 revenue of $3.7 billion and more than 12,500 employees worldwide. It was formed in October of 2011 after ITT Corporation’s spinoff of several strategic business segments.

As a stand-alone company, Xylem emerged as a world leader in water technology.

There was no immediate change in Xylem’s full-year 2016 adjusted earnings outlook.

This is a massive acquisition for Xylem after a series of much smaller acquisitions in the water tech sector that began in 2013, and continued last year and through this February.

The transaction is subject to customary closing conditions and regulatory review and is expected to close in Q4 2016.

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