Friday, October 07, 2011

Bringing New Tech to Old Sectors

Silver Springs Networks is the latest addition to a growing list of energy efficiency companies in The Mothers of Invention Index.  The company offers an array of smart grid applications to electric utilities such as advanced metering and distribution automation.  It also offers solutions for used by customers opting for demand response or with electric vehicles.  The various solutions are based on a mix of technologies from a string of networking, metering and electronics manufactures.  Silver Springs’ partner list is lengthy and includes some of the usual utility suppliers such as General Electric and ABB.  However, there are a few partners that are not usually associated with electric power grids such as Oracle and Cisco Systems.

The list of customers is also impressive and includes Baltimore Gas and Electric, Execlon’s ComEd, American Electric Power, Pacific Gas and Electric, Florida Power and Light Company, Western Power and Indianapolis Power and Light among others.  Silver Springs has also sold to customers outside the U.S. such as Australia’s CitiPower.

Clearly Silver Springs Network products and services have gained a foothold in the electric utility market.  The customer based most likely has already delivered strong sales and perhaps even profitability.  We expect the company to be a target at some point of larger player such as General Electric that wants a complement to existing utility products and services.  An initial public offering seems less likely as the company is not likely pressured to raise capital to support operations or grow.  With the IPO market in the dumbs, it hardly seems worthwhile.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

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