SPOKANE, Wash., September 12, 2002 — Itron Inc., Tuesday announced the signing of an agreement to acquire Regional Economic Research, Inc. (RER), a San Diego, California based company specializing in energy consulting, analysis and forecasting services and software.
The acquisition is expected to close by September 30, 2002.
Privately-held RER provides forecasting services and software products to improve system operation, scheduling, risk management and financial performance. RER also offers consulting and analysis services including planning and evaluation of energy efficiency and renewable energy and distributed generation programs, analysis of energy usage patterns (including load research and load profile development), and management consulting in the area of retail competition.
“The acquisition of RER is another key step in our mission to broaden the solutions we provide and value we deliver to participants throughout the energy and water marketplace,” commented LeRoy Nosbaum, chairman and CEO of Itron.
Earlier this year, Itron acquired LineSoft, which provides software tools and engineering services to optimize utility transmission and distribution systems, and eMobile Data, which provides web-based software solutions for management of utility field workforces.
“Balancing the supply and demand of energy is critical for the health of our economy and our environment. RER’s experience, analytical resources and software tools, together with Itron’s data collection and communication expertise and customer base, results in a powerful combination for our customers, and theirs, to help them predict and achieve that delicate balance,” Nosbaum said.
Founded in 1979, RER’s worldwide client base is comprised of many of the major energy utilities, energy marketers, research organizations, industrial and corporate clients, and government agencies.
RER has an experienced staff of economists, statisticians and engineers with over 40 employees. Corporate headquarters are in San Diego, CA with additional offices in Boston, MA and Vancouver, WA. Revenues for RER for the fiscal year ended May 31, 2002 were approximately $7.7 million.
Details about the Transaction and Expected Financial Impact
“- The total purchase price is $14 million, all of which will be paid in cash.
“- The purchase price is subject to additional earnout payments totaling $4 million, $2 million in each of 2003 and 2004 in the event revenue hurdles in those years are exceeded.
“- The acquisition does not result in a change to Itron’s previously issued earnings guidance for 2002 and 2003.
“- For Proforma purposes, the acquisition is expected to be breakeven in 2002 and minimally accretive in 2003.
“- For GAAP purposes, Itron expects additional pre-tax intangible amortization expense of approximately $300,000 in 2002 and $800,000 in 2003 based on preliminary valuations for intangible assets.
“- Itron does not expect any in-process R&D related to the acquisition.
Itron is a technology provider and critical source of knowledge to the global energy and water industries. More than 2,000 utilities worldwide rely on Itron technology to deliver the knowledge they require to optimize the delivery and use of energy and water.
Itron delivers value to its clients by providing industry-leading solutions for meter data collection, energy information management, C&I customer care, load management and demand response, transmission and distribution system design software and services, and web-based workforce automation.
Itron’s website can be found at www.itron.com.