Federico de’ Stefani (Chairman and CEO of SIT): “We aim to develop an international smart meters hub.”

Acquisition Highlights:

• Janz is an established European operator that manufactures and markets residential volumetric water meters;
• In 2019, Janz reported revenues of €18.6 million and EBITDA of €4.0 million, with an average growth rate over the last 5 years of 9% and 23% respectively;
• The transaction, which involves the acquisition of 100% of Janz, will be financed by a new credit line that SIT has obtained from the banks participating in the existing pool financing;
• The acquisition value is €28 million (cash & debt free).

Padua, October 15, 2020 – SIT S.p.A., a multinational company listed on the MTA segment of the Stock Exchange, which through its Heating and Smart Gas Metering divisions creates intelligent solutions for environmental control and consumption measurement, has signed a binding agreement for the acquisition of 100% of Janz-Contagem e Gestão de Fluídos S.A., an established Portuguese company owned by the Janz family specializing in the production of residential water meters.

The acquired company – Founded in 1915 by the Janz family with its registered office and production facility in Lisbon (11,000 m², 250 employees), the company has developed a wide range of mechanical meters and particularly excels in volumetric metrological technology, with which it not only equips its own meters but also supplies the main operators in the sector.

Sales reached €18.6 million in 2019 with an average growth rate over the last 5 years of 9%, thanks to progressive international expansion in Europe and Latin America (Janz is present in 25 countries) and the introduction of smart meters.

The 2019 revenue was generated by €6.7 million in Portugal, where Janz holds a market share of approximately 50%, while the remainder was generated mainly in other European countries for €7.8 million and in South America for approximately €2.2 million.

The transaction – The scope of the acquisition includes, in addition to 100% of Janz CGF, a division that handles mechanical processing and a shareholding in the distribution company in Spain and South American markets for Janz products, segments that will merge into a single entity at closing, expected by the end of 2020.

The agreed price, excluding cash and financial debt, is approximately €28 million and, in addition, an earn-out of up to €0.8 million is provided based on the achievement of specific targets during 2021. The completion of the acquisition is expected in December 2020 and is subject to the satisfaction of certain conditions, including obtaining all legal approvals and authorizations. The transaction will be financed by a new credit line that SIT has obtained from the banks participating in the existing pool financing.

Rationale – The transaction is strategic for SIT as it allows further enhancement of MeteRSit, the Group’s smart metering division, by applying to the water sector the know-how already present and recognized by the market. With the acquisition of Janz, SIT expands its product portfolio to water meters, a market expected to grow significantly in the coming years[1]. In particular, the “smart” meters segment will grow thanks to the substantial investments planned by Utilities to reduce losses in the water distribution network. Janz’s product portfolio will be further developed by benefiting from MeteRSit’s measurement and consumption data communication technologies.

“The skills and know-how we have developed with gas meters, particularly regarding meter communication with smart grids, will form the basis of the synergies we will create with Janz, to accelerate the growth path in the smart water meters segment” stated Federico de’ Stefani, Chairman and Chief Executive Officer of SIT S.p.A.. “The objective is to establish an international player in smart meters, gas and water, representing excellence in measurement and communication technologies to support Utility networks. A made by SIT technological excellence center dedicated to the development and worldwide distribution of intelligent meters, leveraging certified skills and advanced processes for measuring energy elements to protect natural resources.”

For Manuel Janz, Chairman of BJH, the main shareholder of Janz, “the legacy developed over four generations of the Janz family is secured in this transaction, which will enable the company to expand, supported by SIT’s recognized know-how in the smart metering sector, a crucial area in today’s market.”

The SIT Group is assisted by SAT Law Firm – Spinazzi Azzarita Troi Genito and by PLMJ Advogados for legal aspects, by PwC for financial, accounting and tax due diligence. The Oaklins team, coordinated by partners Enrico Arietti and Diogo Torrado, acted as financial advisor to the SIT Group.

BJH was assisted in this transaction by Garrigues Portugal.

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[1] According to some analyses, the expected annual growth rate (CAGR) of the “smart water metering” market will be 10% over the next 5 years (cf. MarketsandMarkets, August 2019), with three main growth areas: North America, Europe and Asia/Pacific.