Smart grid companies: The Elster IPO – where’s the upside?

Posted By: MSS, Inc. An Oracle Primavera Partner and Smart Grid Consultant with experience in DOE Smart Grid projects and earned value management implementation.

. The buzz in the industry is about the impending IPO of Elster, the smart grid company headquartered in Germany that makes meters and comms for electric, gas and water.

My question: Where’s the upside?.On the technical front, Elster is a middle-of-the-pack provider of quasi-proprietary meters and RF mesh communications. On the customer front, Elster has had only a few small wins recently in the U.S. It seems unlikely to unseat the front-runners for the next round of big deals at large investor-owned utilities. There may be some value in Elster’s “triple-play” of electric, gas and water. For those utilities that want smart meters for all three, a smart grid company that offers a single-source approach has its appeal. Elster’s exposure to gas and water should also smooth out some of the electric sector’s lumpiness. And there may also be value to Elster’s German roots as Europe accelerates its smart metering projects. But even taking those factors into account, it’s hard to see when and how Elster ever gets a big pop. Two years from now, Elster is likely to be a solid but unspectacular performer in a market that is clearly overcrowded. Despite Elster’s ho-hum long-term prospects, its IPO may do fine in the short term. Institutional investors are eager to find a way to participate in the smart grid’s growth, but there are only a few publicly traded smart grid companies that are “pure plays” (Itron, EnerNOC, Comverge). Perhaps this scarcity will benefit Elster’s stock. Especially since many investors are steering by looking in the rear-view mirror. If you are an SGN reader, then you already know that smart meters have done better than expected… but they will soon do worse. Stock traders – who often have to keep up to speed in many different sectors – may not realize what lies ahead. Use the Quick Poll to vote on Elster’s IPO prospects. And use the comment form below to give us your opinions of Elster’s upside potential. Stay connected with SGN … Smart grid discussions: Get LinkedIn with Jesse Join Smart Grid News on Facebook Follow us on Twitter Try our RSS feed Get our email digest
Elster has such issues with management and turn over. How do they expect to keep real talent. Elster has become a great training places for all other smart grid company's. Most former Elster sales people are at Itron or with start ups. Not really sure how and IPO is going to help other than raise cash for the ill faded EVO product investment.
Yeah, Itron and many others in the "Smart Meter" space have come to the market too late…All products have their issues ( some more than others), but if you think any of the other suppliers have any hand up…You haven't done your research….Or experienced the system in a production mode. Not that Elster is without issue, but they are solid. Many other systems have serious impacts on electronic equipment within the home or simply don't work….I have had an Elster system up and running with hourly reads since 2006….Now tell me who has experience in the market…..David Whitehouse – 09/23/2010 - 18:53
@David Whitehouse, I can tell that you must or are a loyal employee of Elster, this company is nothing but a joke, management, technology (total package) they buy their way into the market, see their report card in NA, ask any of they could not get any sales on the basis of their technology so they go out and buy their way into the customers thru acquisation. Then they want to shove their technology to the customers. The facts to prove it.

I am surprised Elster NA (previous ABB Metering) would have survived if it was not for Elster Europe, the management and the rest of the NA staff is nothing but a joke. I would not put a penny in this company just like what Jesse wrote, no long term strategy or vision.

Robby Coltran – 09/23/2010 - 20:18

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