This morning Cooper Industries announced the purchase, for an undisclosed amount, of wireless smart grid developer Eka Systems. On Monday Sunnyvale, Calif., Maxim Integrated Products said it would pay $315 million for Teridian Semiconductor, a developer of power monitoring device based in Irvine, Calif.
On Eka, Cooper Industries says the company’s technology is at an early stage of development with little change of going commercial anytime soon. “This acquisition represents a long-term commitment to this space as we plan to make significant additional organic investments in this product line,” Cooper explained in a prepared statement.
Maxim said Teridian had a 50 percent market share in the fast-growing system-on-chip (SoC) energy measurement market. Maxim will use Teridian’s market position to accelerate its sales of existing power management systems.
There has been a steady flow of smart grid M&A deals over the past year. Last summer GridPoint acquired the energy business of Canadian web technology services company Lixar SRS and V2Green a company that develops technology to manage the charging of electric cars. Also, Sensus, a North Carolina company with $670 million in annual revenues, bought Boise, Idaho-based Telemetric, a provider of communication solutions for smart grid systems. And in September Google-backed Silver Spring Networks acquired home energy management startup Greenbox SRS.
According to recent market research reports less than half of the nation’s top 20 power utilities are using analytical software to comb through the mountains of data generated by the growing number of smartgrid devices being deployed, mostly as demonstration projects. Smart grid demonstrations are going on in Chicago, the Bay Area and Miami.
Going fully commercial for smart grid companies will require lots of cash. That’s one reason blue-chip, straight technology companies with deep pockets like Google, IBM and IT giant Cisco Systems, are committing significant investments to smart grid initiatives as they want to get in early on what they believe could be the next tech-boom. The federal government is also investing, having committed nearly $4 billion to smart grid projects to increase the “reliability, efficiency and security of the nation’s [electricity] transmission and distribution system.”
Regarding long-term funding some companies, including Silver Spring, which so far has raised $275 million across multiple VC rounds, is now looking to raise more cash via an upcoming IPO managed by Morgan Stanley.
Either way much like the rest of the clean energy sector, smartgrid’s steep cash requirement ensures for more M&A transactions (and IPOs) in the future.