“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.”
Ronald Sege, Chairman and CEO, Echelon Corp., said, “This transaction provides immediate and significant value to our stockholders. Our customers have become particularly excited about our strategy of helping them embrace our estimated 140m 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.
“The combination of Adesto and Echelon promises to accelerate this growth strategy through expected synergies in product, engineering, sales, marketing and service.”
The acquisition price represents a total equity value of approximately $45million, and a total enterprise value of about $30m, after accounting for Echelon’s cash and investments on its balance sheet at March 31, 2018, as well as expected transaction expenses of approximately $4m.
The transaction is subject to customary closing conditions, including approval by Echelon’s stockholders. Adesto expects the transaction to close in the third calendar quarter of 2018, after which time Echelon will become a business unit within Adesto.
