Itron Inc. (ITRI) – Part 2 – Business Issues

The table summarizes Itron’s acquisitions over the years:



































Date Name Acquisition Amount Product/Technology
3/2002 LineSoft Corporation $43.5M – half cash, half stock (848,870 shares issued) Transmission and Distribution software solutions – optimizes the construction/rebuild of transmission and distribution lines.
10/2002 Regional Economic Research (RER) $14.3M cash. Additional $3.7M earn out cash paid over 2 years as revenue targets were exceeded Energy consulting, analysis and software services and associated software.
10/2002 eMobile Data Corporation $9.4M cash web-based workforce management solutions.
3/2003 Silicon Energy $71M cash Enterprise Energy Management Software targeted for both utilities and large energy users. Provided company foothold into the large energy user area. Had ~$15M revenue.
7/2004 Schlumberger’s Electric Meter (SEM) Business $256M Cash market share in residential electronic meter space. Had $229M revenue.
4/2006 Quantum Consulting $4.5M Cash Consulting services in energy efficiency, planning design, and market research.
6/2006 ELO Systemas $3.85M Cash AMR Technology and related manufacturing and service in Brazil.
11/2006 Flow Metrix, Inc. $13.6M Cash Leak detection for underground pipelines to complement fixed network water products.
4/2007 Actaris Metering Systems $1.7B Cash Gained breadth in the gas & water metering area along with geographical reach in Europe.



Itron is a globally diversified company and underscored it further with the Actaris acquisition this year. Comparing revenue numbers prior to acquisition Actaris was bigger than Itron. Blending the unique identity of the two companies will require time and could, in the meantime portray haphazard coordination at the helm. Eventually, the products and geographical diversification Actaris provides should enable Itron to navigate markets that were previously a challenge to charter. This is Itron’s gamble at putting resources for gaining resources.

Itron was able to accommodate almost all of the various purchases by combining cash generated from the business with an accumulated debt of $1.6B. For the LineSoft acquisition the company paid half in stock and for funding the Actaris acquisition 4.1 million additional shares were issued.

The market sector that Itron is trying to tap into is sprawled out. To uniquely address the various categories requires a breadth of products which can be arduous to develop or assemble. The rapid pace of acquisitions has helped Itron gain popularity in the market. However, they encounter the risk of spreading themselves too thin in some of these areas. Continuing the aggressive acquisition strategy along with organic growth by developing a culture of strong R&D internally is the right strategy to go forward. In the last few years, Itron has proved they can do the former successfully but for the latter part, the jury is still out.


Itron (ITRI) Analysis:
  1. Itron (ITRI) - Part 1 - Introduction.
  2. Itron (ITRI) - Part 2 - Business Issues.
  3. Itron (ITRI) - Part 3 - Outlook.



No comments :

Labels

401k ( 15 ) Abad Turtle Beach ( 1 ) Abrams Capital Management ( 5 ) Acoustic Electric Guitars ( 1 ) Acoustic Guitars ( 1 ) ACT ( 1 ) Activist ( 4 ) Address Change ( 2 ) Advanced Placement ( 4 ) air asia ( 2 ) airlines ( 2 ) Akre Capital Management ( 18 ) Alex Roepers ( 5 ) AP ( 4 ) apartments ( 2 ) Appaloosa ( 15 ) ARIUS ( 1 ) Arlington Value Capital ( 3 ) Atlantic Investment Management ( 5 ) Ayemenem ( 1 ) Bangalore ( 3 ) Bangkok ( 2 ) Bannerghatta National Park ( 1 ) barbuda ( 2 ) Battery Park ( 1 ) Baupost ( 2 ) Baupost Group ( 17 ) bay area ( 2 ) BDCs ( 3 ) Benjamin Graham ( 2 ) Benjamin Graham Model ( 2 ) Berijam Lake ( 2 ) Berkshire Hathaway ( 31 ) best sites ( 9 ) Bill & Melinda Gates Foundation ( 19 ) Bill Ackman ( 19 ) Bill Gates ( 20 ) Blue Ridge Capital ( 16 ) Blum Capital Partners ( 12 ) books ( 4 ) Boone Pickens ( 2 ) BP Capital Management ( 2 ) Brave Warrior ( 3 ) Brave Warrior Advisors ( 12 ) british honduras ( 2 ) Bruce Berkowitz ( 19 ) Bruce Fund ( 17 ) Camcorders ( 3 ) canada ( 4 ) cancun ( 3 ) CANROYs ( 7 ) Cantillon ( 12 ) carl icahn ( 9 ) Carl Ichan ( 8 ) casino ( 3 ) Casio ( 2 ) CBRE ( 2 ) CEF ( 2 ) Charles Akre ( 15 ) Charlie Munger ( 19 ) Chase Coleman ( 16 ) Chou Associates ( 24 ) Christmas gifts ( 7 ) Christopher H. Browne ( 7 ) Chuck Akre ( 13 ) Cisco ( 2 ) Class Action Settlements ( 2 ) CLEP ( 1 ) Coatue Management ( 19 ) Cochin ( 2 ) coin collecting ( 266 ) collectibles ( 266 ) Consumer Product Reviews ( 29 ) cook islands ( 2 ) coonoor ( 2 ) Covered Calls ( 2 ) credai ( 4 ) Daily Journal ( 19 ) Dalal Street ( 8 ) Dan Loeb ( 10 ) DAT ( 1 ) David Abrams ( 5 ) David Einhorn ( 22 ) David Swensen ( 17 ) David Tepper ( 15 ) David Winters ( 15 ) DCF ( 2 ) Digital Piano ( 3 ) Dinakar Singh ( 19 ) Donald Yacktman ( 10 ) dry bulk shipping ( 2 ) Duquesne ( 24 ) Education ( 37 ) Edward Lampert ( 20 ) Egerton Capital ( 19 ) Egypt ( 3 ) Elementary Education ( 10 ) Elementary School Textbooks ( 5 ) eReaders ( 2 ) Eric Mindich ( 13 ) ESL Investments ( 13 ) ESPP ( 6 ) ETF ( 2 ) ETN ( 2 ) Eton Park ( 13 ) Everyday Musings ( 58 ) Exam Prep ( 7 ) Exiting the rat race - how to? ( 19 ) EXPLORE ( 1 ) Fair Value Estimates ( 4 ) Fairfax Financial ( 4 ) Fairfax Financial Holdings ( 14 ) Fairholme ( 19 ) Fairpointe ( 19 ) Family Office ( 8 ) FD Laddering ( 1 ) Financial Independence ( 93 ) Fisher Asset Management ( 10 ) Flash Camcorders ( 3 ) flat ( 4 ) flats ( 2 ) Flip ( 3 ) Francis Chou ( 24 ) free ( 17 ) frugal ( 3 ) Frugal Living ( 34 ) Fund Holdings ( 870 ) futures ( 2 ) FVE ( 2 ) gambling ( 3 ) garmin ( 2 ) Genting ( 2 ) george soros ( 22 ) giveaway ( 15 ) Glenn Greenberg ( 16 ) Glenview Capital ( 10 ) GMAT ( 1 ) Google ( 2 ) Gotham Asset Management ( 7 ) gps ( 5 ) GRE ( 1 ) Greenlight Capital ( 22 ) Guitars ( 3 ) Half Marathon ( 2 ) Hawaii ( 2 ) Hedge Funds ( 892 ) HELOC ( 1 ) High School Education ( 7 ) High School Textbooks ( 6 ) HOA ( 3 ) hobby ( 17 ) holiday shopping ( 7 ) Holidays ( 3 ) Holyland ( 11 ) Home Improvement ( 2 ) home ownership ( 5 ) Homes ( 18 ) Homeschool ( 18 ) Houses ( 2 ) Housing ( 3 ) Hykon ( 2 ) Ian Cumming ( 15 ) Icahn Enterprises ( 6 ) india real estate ( 5 ) Infinuvo ( 6 ) Insurance ( 2 ) invesco ( 17 ) investing strategies ( 2 ) Investment Portfolio ( 94 ) Investment Research ( 10 ) Investments ( 7 ) iRobot ( 5 ) Irving Kahn ( 10 ) israel ( 5 ) Jason Maynard ( 10 ) Jefferies ( 2 ) Jeffrey Bruce ( 19 ) Jeffrey Ubben ( 12 ) Jerusalem ( 2 ) Jim Chanos ( 19 ) Joel Greenblatt ( 7 ) John Armitage ( 19 ) John Griffin ( 16 ) John Paulson ( 17 ) Joho Capital ( 15 ) Jordan ( 3 ) Joseph Steinberg ( 9 ) Julian Robertson ( 4 ) Kahn Brothers ( 10 ) Kakkanad ( 4 ) Kanyakumari ( 2 ) Kawai ( 2 ) Ken Fisher ( 10 ) kerala real estate ( 5 ) Kids ( 49 ) Kids Yamaha ( 3 ) Kindle ( 2 ) kochi ( 8 ) Kodaikanal ( 2 ) Korg ( 2 ) Kraft ( 2 ) Kuala Lumpur ( 2 ) KWA ( 2 ) Kynikos ( 19 ) laptop ( 5 ) Larry Robbins ( 10 ) Las Vegas ( 2 ) Leon Cooperman ( 20 ) Leucadia ( 2 ) Leucadia National ( 13 ) Lone Pine Capital ( 9 ) long ( 6 ) long call ( 2 ) long puts ( 3 ) Lou Simpson ( 15 ) LSAT ( 1 ) Mahabalipuram ( 2 ) Malaysia ( 3 ) Marathon ( 2 ) Mark McGoldrick ( 10 ) Markel ( 19 ) Mason Hawkins ( 4 ) MCAT ( 1 ) Melinda Gates ( 12 ) memorabilia ( 266 ) MFP Investors ( 19 ) Michael Dell ( 21 ) Michael Price ( 19 ) Middle School Education ( 4 ) Middle School Textbooks ( 3 ) Mini Notebook ( 3 ) MODUS ( 1 ) Mohnish Pabrai ( 21 ) mortgage ( 2 ) Mount Kellett ( 10 ) MSD Capital ( 21 ) Music ( 6 ) Mutual Funds ( 5 ) mysore ( 2 ) Nelson Peltz ( 9 ) Netbook ( 4 ) Notebook ( 3 ) numismatics ( 266 ) O-Duster ( 1 ) Oahu ( 2 ) offers ( 2 ) Ole Andreas Halvorsen ( 10 ) Omega Advisors ( 20 ) online tax ( 4 ) ooty ( 2 ) Options ( 4 ) Pabrai Fund ( 17 ) passive income ( 7 ) pattaya ( 2 ) Paulson & Company ( 7 ) Paulson and Company ( 9 ) PEG ( 2 ) Pershing Square ( 19 ) Phil Fisher ( 5 ) philately ( 283 ) Philippe Laffont ( 19 ) Piano ( 9 ) PLAN Test ( 1 ) portfolio ( 4 ) Prem Watsa ( 17 ) product reviews ( 13 ) Property Taxes ( 2 ) PSAT ( 1 ) R2I ( 24 ) R2I Finances ( 3 ) R2I Housing ( 5 ) Raising Kids ( 41 ) Rat Race ( 15 ) RBS Partners ( 18 ) reading ( 5 ) real estate ( 6 ) Reducing Expenses ( 2 ) REIT ( 3 ) Retirement Portfolio ( 9 ) Reviews ( 81 ) Richard C. Blum ( 12 ) Robert Bruce ( 19 ) Robert Karr ( 15 ) Robotic Vacuum ( 4 ) Roland ( 2 ) Roomba ( 10 ) schooling ( 2 ) Sears ( 12 ) seeking alpha ( 2 ) Services - Reviews ( 33 ) Seth Klarman ( 19 ) Shipping ( 5 ) Shopping ( 3 ) short ( 5 ) short calls ( 2 ) short put ( 2 ) short puts ( 2 ) short selling ( 12 ) Ski ( 5 ) Sled ( 4 ) Solar Stocks ( 13 ) Soros Fund Management ( 14 ) Southeastern Asset Management ( 4 ) Southwest ( 2 ) spin-offs ( 2 ) SQ Advisors ( 15 ) stamp collecting ( 283 ) Stanley Druckenmiller ( 24 ) Statue of Liberty ( 2 ) Stephen Mandel ( 9 ) Stock Analysis ( 84 ) Stock Investments ( 4 ) Stock Portfolio Updates ( 6 ) stocks ( 3 ) summer ( 2 ) tax ( 6 ) TaxAct ( 3 ) TaxCut ( 1 ) Teacher's Editions ( 5 ) Technology ( 4 ) Test Prep ( 11 ) Thailand ( 3 ) Thekkady ( 2 ) theme park ( 2 ) Third Point ( 10 ) Thomas Gayner ( 19 ) Thyra Zerhusen ( 19 ) Tiger Cub ( 32 ) Tiger Global ( 17 ) Tiger Management ( 13 ) Time Square ( 2 ) TOEFL ( 1 ) TPG-Axon ( 19 ) Travel ( 278 ) Travel Reviews ( 82 ) Trian Fund Holdings ( 9 ) trip report ( 21 ) TurboTax ( 3 ) Tweedy Browne ( 10 ) Vacations ( 28 ) value investing ( 12 ) ValueAct ( 5 ) ValueAct Holdings ( 6 ) Vancouver ( 2 ) Video ( 3 ) Viking Global ( 10 ) Wallace Weitz ( 10 ) Warren Buffett ( 31 ) Wayanad ( 4 ) Weitz Investment Management ( 9 ) wilbur ross ( 17 ) William Von Mueffling ( 12 ) Wintergreen Advisors ( 15 ) Yacktman Asset Management ( 10 ) Yale Endowment ( 17 ) Yale University ( 7 ) Yamaha ( 7 ) YDP ( 1 ) YPG ( 1 )