Access the latest quantum technology

Quantum technology in Bristol and bath - find out more about how you can access the commercialisation of quantum technology for sensing and security

Sunday, July 01, 2018

IoT chip maker Adesto buys networking pioneer Echelon

By Nick Flaherty www.flaherty.co.uk

Acquisitive chip designer Adesto Technologies is to buy low power networking pioneer Echelon for a paltry $45m.

Echelon was founded in 1988 Mike Markkula, one of the keyplayers at Intel and Apple. The LonWorks platform for control networking was released in 1990 for use in the building, industrial, transportation, and home automation markets and the company went public in 1998, making it one of the erliest IoT players.

“Our customers have become particularly excited about our strategy of helping them embrace our estimated 140 million installed LON-powered devices, extend them with new technologies and enhance them with cloud-based analytics to achieve better business outcomes across a variety of applications including smart buildings, smart manufacturing and smart lighting," said Ronald Sege, Chairman and CEO, Echelon. "The combination of Adesto and Echelon promises to accelerate this growth strategy through expected synergies in product, engineering, sales, marketing and service. We look forward to working closely with the Adesto team to ensure a smooth transition and complete the transaction as quickly as possible.”

The acquisition price represents a total equity value of approximately $45 million, and a total 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. This seems low for ove 140m users in a wide range of applications, but Echelon has struggled to keep growing or monetise its existing network customers. 

The deal enhances Adesto's technology assets and capabilities to include broad range of semiconductors, software and systems solutions for Industrial IoT (IIoT).

“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. “Adesto started out providing application specific non-volatile memories for IoT, and we’ve continued to expand our memory portfolio with a wide range of differentiated devices. 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. We’re excited about the potential this acquisition presents as Adesto enters its next phase of growth.”
Adesto expects the transaction to close in the third calendar quarter of 2018, after which time Echelon will become a business unit within Adesto.

Related stories:

No comments: