A significant portion of the connected devices in use today are employed for industrial purposes such as monitoring remote equipment. Liberty Lake, Washington-based Itron Inc. is one of the suppliers shaping this part of the market.

The firm, which mainly sells metering hardware for measuring energy and water usage, today announced plans to acquire publicly traded Silver Spring Networks Inc. for about $830 million. The latter company focuses on helping organizations process the measurements that their connected devices gather. Besides utilities, it also works with municipalities looking to implement the so-called smart city model and enterprises.

A key part of Silver Spring’s product portfolio is a set of cloud services for managing connected devices. The cornerstone of the lineup is the Silver Spring Data Platform, which enables companies to analyze the information that their endpoints generate and perform maintenance tasks such as patching. It has several common points with the recently upgraded Predix platform that General Electric Co. offers for industrial customers.

The Silver Spring Data Platform is complemented by a service called Starfish Studio. Similarly to the simulation technology that Oracle Corp. introduced last month, it enables companies to model how connected devices operate under different conditions before deploying them in the field.

Thanks in part to its cloud offerings, Silver Spring capped off 2016 with a gross margin of 44 percent. That’s significantly higher than what Itron recorded during the same period. The acquisition is expected to boost the latter company’s profits and facilitate annual “cost synergies” of approximately $50 million in the process.

Those expected gains are reflected in the price tag. The $830 million that Itron is offering breaks down to $16.25 per share, a 25 percent premium to Silver Spring’s Friday closing price.

The deal is expected to be completed in late 2017 or early 2018. On top of improving its margins, the deal should also help Itron cement its competitive position as other industrial suppliers likewise work to address the rise of connected devices. Besides GE, Robert Bosch GmbH and Hitachi Ltd. are also developing services for analyzing machine-generated data.

Image: Pixabay