SPOKANE, Wash., February 15, 2002 — Itron, Inc., a technology provider and source of knowledge to the energy and water industries for collecting, analyzing, and applying critical data about electric, gas, and water usage, today announced an agreement to acquire LineSoft Corporation for $42 million in cash and stock.
LineSoft is a provider of software solutions and engineering consulting services for optimizing utility transmission and distribution systems.
“The acquisition of LineSoft is a major step to broaden Itron’s mission of helping utilities optimize the delivery and use of energy and water,” said LeRoy Nosbaum, Itron CEO. “For some time Itron has talked about moving beyond data collection and information creation for meter reading. LineSoft will give Itron a suite of new products, principally design tools, that can help utilities design new transmission and distribution lines as well as upgrade existing facilities.”
LineSoft is a privately held company, based in Spokane, Washington, that licenses and sells, primarily to electric utilities, the following:
– Software seat licenses and software services for the efficient design, construction and maintenance of transmission and distribution lines and distribution substations, including new construction, upgrades and maintenance,
– Engineering design services for transmission and distribution lines, and
– Utility pole joint use services, which help utilities keep track of what is attached to existing distribution poles, what can be added to them and whether or not the poles are in compliance with existing codes and safety regulations.
The total purchase price is $42 million, subject to additional earnout payments to LineSoft shareholders in the event that revenue hurdles in 2002 to 2004 are significantly exceeded.
Half of the purchase price will be paid in cash and half in Itron common stock at closing. Any earnout payments will also be paid half in cash and half in Itron common stock. The number of Itron shares to be issued at closing will be based on the average price of Itron stock prior to closing, subject to a minimum and maximum per share price of $22 to $32.
The transaction has been approved by both Itron’s and LineSoft’s Board of Directors, and is subject to customary closing conditions. The transaction is expected to close in March 2002.
Prior to this transaction, Itron projected a revenue range for 2002 of $248 to $260 million, which represents 10-15% growth over 2001, and an EPS range of $.88 to $.95 per diluted share, which represents 20-30% growth over 2001.
In 2002, the acquisition is expected to result in an additional $16 to $20 million in revenues. In 2002, Itron will write-off of approximately $7 million of in-process R&D, and will report approximately $3.0 million more in amortization of intangibles in connection with the acquisition.
In 2002, excluding the write-off of in-process R&D, and the amortization of intangibles, the acquisition is expected to be breakeven to moderately dilutive to the above guidance.
In 2003, the acquisition is expected to be moderately accretive, inclusive of additional intangible amortization. Wachovia Securities is acting as Itron’s financial advisor, and Harris Williams & Co. is acting as financial advisor to LineSoft. “Given that LineSoft is also Spokane-based, organizational integration synergies should be more manageable than most acquisitions,” said Nosbaum. “We are delighted with the exceptional talent and expertise of the LineSoft employees and look forward to having them become a part of Itron’s team.”
Itron Inc. is a technology provider and source of knowledge to the energy and water industry for collecting, analyzing, and applying critical data about electric, gas, and water usage. Itron technology touches more than $200 billion in energy and water transactions annually.
Today, Itron systems are installed at more than 2,000 utilities in over 45 countries around the world and are being used to collect data from 275 million electric, gas, and water meters. Of those, more than 850 customers use Itron’s radio and telephone-based technology to automatically collect information from over 20 million of those meters. Itron’s software systems are also in use at a number of the newly created wholesale energy markets in the U.S. and Canada to provide critical billing and settlement systems for the power flowing into and out of those deregulating markets.
LineSoft, a privately held company located in Spokane, Washington, has been providing engineering design software applications and consulting services to the utility industry since 1988. LineSoft has more than 130 customers in 14 countries around the world. LineSoft generated approximately $14 million in revenue in 2001, and has been growing revenue in excess of 50% since 1999. LineSoft’s major shareholders include its Founder Fred A. Brown and OCM/GFI Power Opportunities Fund.