Hubbell Inc. to acquire Aclara from Sun Capital

Hubbell Inc. recently announced it has entered into a definitive agreement to acquire Aclara Technologies LLC, an affiliate of Sun Capital Partners, Inc., for approximately $1.1 billion in an all-cash transaction.

The transaction strengthens and broadens Hubbell Power Systems’ competitive position across utility markets. The acquisition will combine the complementary strengths of Aclara and Hubbell Power Systems, providing the opportunity to integrate Aclara’s strong customer relationships and smart infrastructure solutions into the Hubbell portfolio and accelerate ongoing innovation efforts to address utility customer demand for data and integrated solutions.

Aclara offers a comprehensive suite of solutions, including advanced metering infrastructure, meters and edge devices, software, and installation services. These products and services provide utilities visibility into their distribution networks, optimize network performance and help engage with their customers. With approximately 1,200 people working with more than 800 electric, water and gas utilities worldwide, Aclara provides actionable insights to help utilities predict, plan and respond to conditions, improve operational efficiency and promote resource conservation to customers. Aclara reported revenues of $500 million and adjusted EBITDA (1) of $90 million for the fiscal year ended Sept. 30, 2017.

“This is an exciting transaction that is consistent with our long-standing acquisition strategy. Aclara participates in attractive markets that complement our core with high quality products and talented people,” said David G. Nord, chairman, president and CEO. “Together with Aclara, Hubbell will be even better positioned to serve customers through a differentiated smart grid solution and expanded portfolio. Hubbell Power Systems has a history of successfully integrating acquisitions under Gerben Bakker’s leadership, and we both look forward to welcoming our new colleagues. We have long admired the position of Aclara’s businesses in the industry, and are confident that integrating Aclara’s capabilities with Hubbell’s will allow us to deliver increased value to customers and shareholders.”

“We are delighted to join a company with Hubbell’s resources, alliance relationships with major utilities, and shared commitment to quality and innovation,” said Allan Connolly, president and CEO of Aclara. “Aclara appreciates the support Sun Capital provided to establish us as a world leading provider of end-to-end, smart infrastructure solutions for electric, water and gas utilities. We look forward to our future with Hubbell and all that we will achieve together.”

Strategic & Financial Benefits of Transaction

  • Strengthens competitive position of attractive Hubbell Power Systems business. The addition of Aclara’s software and analytics solutions, along with its robust and flexible communications networks, to Hubbell Power Systems’ performance-critical components, will provide a differentiated solution for a broader set of utility customers to meet their “next gen” needs.
  • Extends smart technology and automation capabilities. Aclara’s advanced metering solutions and grid monitoring sensor technology, as well as its leading software enabled installation services, will expand Hubbell’s presence in utility automation, and will allow Hubbell to deliver an end-to-end solution to customers.
  • Robust financial profile. The transaction is expected to be accretive in 2018 to Hubbell’s diluted EPS, excluding intangible amortization and deal related costs, and in 2019 on a GAAP basis. Further, Hubbell expects to maintain an investment grade rating.

Transaction Financing & Approvals

Hubbell has obtained fully committed bridge financing from J.P. Morgan Securities LLC, BofA Merrill Lynch, and HSBC Securities (USA). Hubbell expects its debt-to-adjusted EBITDA(2) ratio to be 3.1x at the close of the transaction, and anticipates reducing this ratio over the next few years.

The transaction, which is expected to be completed in the first quarter of 2018, is subject to the satisfaction of customary closing conditions, including U.S. antitrust clearance.

Aclara is a world-class supplier of smart infrastructure solutions (SIS) to water, gas, and electric utilities globally. Aclara SIS offerings include smart meters and other field devices, advanced metering infrastructure and software and services that enable utilities to predict and respond to conditions, leverage their distribution networks effectively and engage with their customers.

Hubbell Incorporated is an international manufacturer of quality electrical and electronic products for a broad range of non-residential and residential construction, industrial and utility applications. With 2016 revenues of $3.5 billion, Hubbell Inc. operates manufacturing facilities in the United States and around the world. Its corporate headquarters is located in Shelton, Connecticut.

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