Under the agreement, Echelon will sell its grid operations to S&T for approximately $5m in upfront consideration, dependent in part on the value of net assets at closing.
Additionally, Echelon will also supply narrowband high-reliability power line communications chips to S&T for use in their smart meters and related products.
Echelon will also receive benefits in revenue from the products purchase as well as rental income, and potential performance-based consideration of up to $1m.
The transaction, which is subject to regulatory approvals, is expected to be closed by the end of the year.
Echelon chairman and CEO Ron Sege said: "This transaction will allow us to focus fully on becoming a key enabler in the transition to the Industrial Internet of Things, with the confidence of knowing that S&T will continue to operate our grid business and support our customers, partners and sales pipeline.
"With the closing of this agreement, we can turn our attention to developing, marketing and selling our industry-leading, open-interoperable control networking platform for the IIoT — especially bringing the benefits of IP-based converged control systems to building automation, outdoor lighting and indoor lighting applications worldwide."
S&T CEO Hannes Niederhauser said: "Acquiring Echelon’s grid business means an important expansion of our Smart Energy capabilities, further demonstrating our commitment to the energy market and our belief in the smart grid opportunity."
"We look forward to combining Echelon’s successful Networked Energy Services (NES) platform offerings with S&T’s software, system integration and project delivery capabilities, to serve smart energy customers throughout Europe and beyond."
