General Electric and unnamed private equity firms are among the bidders for Swiss-based smart metering company Landis+Gyr in an auction that could fetch as much as $2 billion, Reuters reported. The auction has advanced to a second round, Reuters reported. Landis+Gyr makes “smart” meters used for measuring power and other energy uses, and has hired Credit Suisse and Lazard Ltd. to advise on a potential sale.
(Reuters) – General Electric Co (GE.N) is among the bidders for Swiss-based smart metering company Landis+Gyr in an auction that could fetch as much as $2 billion, four people familiar with the matter said.
Landis+Gyr has also drawn initial bids from several private equity firms as the auction has advanced to the second round, those people said. However, some buyout firms cooled interest because of high expectations from the seller regarding valuation, these people said.
Landis+Gyr, which makes advanced or “smart” meters used for measuring power and other energy use, has hired Credit Suisse (CSGN.VX) and Lazard Ltd (LAZ.N) to advise on a potential sale of the company, people familiar with the matter told Reuters on Feb. 17.
Landis+Gyr, which competes with companies such as Itron Inc (ITRI.O) and EnerNoc Inc (ENOC.O), has around $200 million in annual earnings before interest, tax, depreciation and amortization (EBITDA) on roughly $1.5 billion in annual revenues, these people said.
The company could be sold for about 10 times EBITDA, suggesting a sale price of roughly $2 billion, the people said. For comparison, Itron trades at roughly 8 times EBITDA.
Credit Suisse has offered potential buyers staple financing — financing offered by a bank which is advising the seller — a third source said. (Reporting by Soyoung Kim and Megan Davies, additional reporting by Michael Erman and Scott Malone)