Cooper Industries Acquires Cannon Technologies

Aug. 24, 2006
Cooper Industries has announced the acquisition by Cooper Power Systems, Inc. of Cannon Technologies, Inc., a Minneapolis-based provider of automation technologies for monitoring and metering, and energy management by electrical utilities.

Cooper Power Systems, Inc. has acquired Cannon Technologies, Inc., a Minneapolis-based provider of automation technologies for monitoring and metering, and energy management by electrical utilities. With this acquisition, Cooper Power Systems will provide customers with comprehensive solutions -- from the meter to the control room -- including the ability to use a wide variety of communications technologies to link equipment.

The purchase was made from a private-equity fund managed by GFI Energy Ventures, the majority owner of Cannon, and the Cannon Technologies founders. Financial terms were not disclosed.

Cannon Technologies serves more than 400 utility customers in North America with automation technologies. Cannon's Yukon®Advanced Energy Services software provides a scalable platform for remotely reading meters, controlling peak load, managing power, and monitoring substation and distribution system assets. The company's Yukon software communicates to hundreds of thousands of endpoint devices at utilities of all sizes. Cannon's installed customer base is rapidly expanding, with revenues expected to be in excess of $55 million in its current fiscal year.

"Utilities face many challenges today, from the burden of a rapidly aging infrastructure, to overloaded substation and distribution system assets, and rising energy costs," said Cooper Chairman and Chief Executive Officer Kirk S. Hachigian. "Cannon provides Cooper Power Systems with automation technologies and expertise that will help our customers increase productivity, improve system reliability and reduce the cost of delivering electrical power. With Cooper Power Systems' 80-person technical sales force and broad distribution channels, we significantly extend Cannon's capabilities and also accelerate our ability to deliver best-in-class automation and asset management solutions. We are investing in these new capabilities and staking a leadership position in next-generation technologies that will drive additional value for our existing asset portfolio."

The acquisition of Cannon Technologies and the recently announced licensing agreement with Sensus Metering Systems are part of a series of technology investments Cooper has made to broaden its range of capabilities. Using the Sensus FlexNet AMI technology provides Cooper Power Systems with significant opportunities for developing new products and solutions that help utility customers better manage their assets.

Founders Ed Cannon and Joel Cannon will continue to lead the business, which will operate as part of the Cooper Power Systems division of Cooper Industries.

Cannon Technologies will be included in Cooper's financial results from the date of the acquisition. The acquisition is anticipated to be slightly dilutive to earnings per share in the first twelve months, exclusive of the one-time requirement to expense the value of in-process research and development costs at the date of the acquisition.

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