Echelon Corp. (ELON) Friday said it has signed a definitive agreement to sell its Grid operations to S&T AG, a publicly traded European IT systems provider with a focus on smart energy products and services.
Under the agreement, Echelon will receive approximately $5 million in upfront consideration, dependent partly on the value of net assets at closing.
After fees, expenses, and restructuring charges are considered, the company expects the net benefit to be nominal.
The companies expect the deal to close by the end of the year. Echelon is an open-interoperable control networking pioneer for the Industrial Internet of Things or IioT.
Echelon will also become a supplier of its industry-leading narrowband high-reliability power line communications chips to S&T for use in their smart meters and related products.
The company will receive future benefits in the form of revenue from the purchase of these products, as well as rental income, and potential performance-based consideration of up to $1 million.
As part of the transaction, around 60 current Echelon employees are expected to join S&T.
The acquisition is expected to be accomplished via a subsidiary established by S&T.
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