RALEIGH, NC - June 7, 2006
In keeping with its strategy of expanding its automatic meter reading product portfolio and addressing increasing market demands for Advanced Metering Infrastructure (AMI), Sensus Metering Systems Inc. (Sensus) announced that it has entered into a definitive agreement to purchase the assets of Advanced Metering Data Systems, LLC (AMDS) located in New Orleans, LA.
“The purchase of AMDS’ assets takes us to the top level of today’s radio-frequency (RF) fixed network AMI systems and complements our current metering and automatic meter reading (AMR) systems and services,” says Dan Harness, CEO and President of Sensus. “Our experience working with the AMDS licensed spectrum AMI technology in the electric utility market has helped us realize the benefits that the system can provide across all of our electric, gas, and water utility customers in North America.”
Sensus has marketed AMDS’ technology to the electric utility and combined utility markets in North America for the past 18 months under an exclusive agreement. The system is promoted as FlexNet® with AMDS Connect® AMI System and has been exceptionally well received in the market, with system deployments and numerous pilot programs. Following the closing of the sale, the system will be promoted solely under the Sensus name. The AMDS fixed network RF system features full two-way communications directly with electric meters and enables functions such as remote meter programming and remote meter disconnect/connect. The system’s two-way capability also permits it to work under the system coverage umbrella with other compatible technologies such as smart thermostats and demand response components. These full two-way system capabilities will enable utilities to better manage their distribution networks for the foreseeable future and to address the Smart Metering initiatives underway in North America today. The system also features one-way fixed network capability for gas and water meter endpoints.
AMDS founder and CEO Britton Sanderford, who will take on the newly created position of Chief Technology Officer for Sensus, said, “This is a great event for AMDS. Having worked with the Sensus team over the past couple of years ensures me that this is the right direction for AMDS. The acquisition by Sensus Metering Systems will put the AMDS AMI technology and its team of talented managers and engineers under the direction of a strong business that has a long history and deep experience in the AMR and utility metering markets.”
The asset purchase agreement, signed on June 2, 2006, provides that Sensus will acquire substantially all of the assets and assume certain identified liabilities of AMDS for $45.4 million in cash at closing and the payment of additional cash consideration if the acquired business achieves certain performance targets through March 2011. In addition, pursuant to a Subscription Agreement with AMDS, Sensus Metering Systems (Bermuda 1) Ltd., Sensus’ parent, will issue certain preference shares to AMDS, which are subject to the performance of the acquired business over a five-year period following the closing. Sensus will finance the transaction with equity contributions from Sensus’ current principal investors and cash on hand. Closing of the acquisition is subject to the satisfaction of certain conditions, including obtaining certain governmental approvals.
About Sensus Metering Systems
The Sensus Metering Systems companies are leading world-class providers of water, gas, heat and electric meters including comprehensive metering communications system solutions that comprise both automatic meter reading (“AMR”) and advanced metering infrastructure (“AMI”) systems. Additional linked businesses include Smith-Blair, Inc. a leading provider of pipe clamp & coupling products for the water, gas, and industrial markets; and Sensus Precision Die Casting a producer of complex, high quality die castings.
All statements in this release, other than historical facts, are made in reliance on the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and are subject to change at any time. These statements reflect the Company’s current expectations regarding its financial position, revenues, cash flow and other operating results, business strategy, financing plans, forecasted trends related to the markets in which the Company operates, legal proceedings and similar matters. The Company’s expectations expressed or implied in these forward-looking statements may turn out to be incorrect. The Company’s actual results could be materially different from its expectations because of various risks. These risks, some of which are discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K (SEC File No. 333-113658) for the fiscal year ended March 31, 2007 as filed with the Securities and Exchange Commission on May 16, 2007, include its dependence on new product development and intellectual property, and its dependence on independent distributors and third-party contract manufacturers, automotive vehicle production levels and schedules, its substantial financial leverage, debt service and other cash requirements, liquidity constraints and risks related to future growth and expansion. Other important risks that could cause actual events or results to differ from those contained or implied in the forward-looking statements include, without limitation, the Company’s ability to integrate acquired companies, general economic and business conditions, competition, adverse changes in the regulatory or legislative environment in which the Company operates, and other factors beyond the Company’s control.