Adesto acquires networking pioneer Echelon in IoT push
The deal represents an enterprise value of about $30 million after accounting for Echelon’s cash and investments on its balance sheet at March 31, 2018, as well as expected transaction expenses of approximately $4 million.
Adesto, which went public in 2015 (see Lossy Adesto preps IPO), has been on the acquisition trail recently. It moved to buy Ireland’s S3 Semiconductor earlier this year (see Adesto buys Dublin-based S3 Semiconductor).
Echelon, was founded in 1988 by Clifford Markkula, an early investor in Apple, and in 1990 launched its LonWorks platform for open-standard networking in building, industrial, transport and home automation markets. The company went public in 1998.
“With the acquisition of Echelon, we are continuing to advance toward our vision of becoming a significant player in semiconductor and communication systems for IoT markets, in particular industrial IoT,” said Narbeh Derhacobian, CEO of Adesto, in a statement.
“Through S3 Semiconductors, we added strong mixed-signal and RF ASIC capabilities. Following the acquisition of Echelon, we will be able to provide not only semiconductors, but also powerful software and deep systems and solutions expertise for industrial systems and enterprise automation, with a loyal customer base,” he added.
The transaction is subject to approval by Echelon’s stockholders but Adesto expects the deal to close 3Q18 at which time Echelon will become a business unit within Adesto.
Adesto said it would finance the transaction though a combination of cash, equity and debt and the company filed documents with the Securities and Exchange Commission registering plans to raise up to $40 million by issuing fresh shares in the company.
www.adestotech.com
www.echelon.com
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