Knoxville’s GRIDSMART Technologies acquired for $87 million
By Tom Ballard, Chief Alliance Officer, PYA
It’s clearly a happy beginning to 2019 or a late Christmas present for the team that founded and/or invested in Knoxville’s GRIDSMART Technologies Inc.
In an announcement late yesterday, Cubic Corporation said that it is acquiring the West Knoxville-based company “for approximately $87 million in cash, subject to customary adjustments.” The acquisition complements the existing Cubic portfolio of integrated solutions that increase situational understanding for transportation, defense C4ISR and training customers worldwide as they seek to decrease urban congestion and improve the effectiveness and operational readiness of military units.
Co-founded by Vig Sherrill and Bill Malkes in 2006 as Aldis, GRIDSMART is a market-leading, technology-driven business with a differentiated video tracking offering in the intelligent traffic systems (ITS) market. The company specializes in video detection at the intersection utilizing advanced image processing, computer vision modeling and machine learning along with a single camera solution providing best-in-class data for optimizing the flow of people and traffic through intersections.
“We are pleased to become a member of the Cubic family where GRIDSMART’s vision to improve one billion lives with intelligence will continue in alignment with Cubic’s overall purpose,” Malkes said in yesterday’s announcement.
We first met the energetic and driven Chief Executive Officer (CEO) during our tenure at Oak Ridge National Laboratory and have continued to follow GRIDSMART’s growth since founding teknovation.biz seven years ago. (Click here for links to all of those stories starting with this late 2012 article about Malkes.)
GRIDSMART was the fourth collaboration for Sherrill and Malkes. Earlier, they founded ASIC International, which was acquired by Flextronics; Healthspex, which they co-founded with Charlie Barnett; and Trade Winds, which was acquired by Sirit Corporation. Sherrill left active management a number of years ago.
From its humble beginnings, GRIDSMART has amassed an amazing record, counting and classifying more than 43 billion vehicles through 54 million hours of real-world video processing in 7,000 intersections spanning across 1,200 cities around the world.
“Advanced traffic management built on smart sensors is a key to efficient and responsible city management,” Malkes said. “As this need continues to grow not only in cities across the U.S. but also throughout the world, we look forward to seeing the synergies and growth opportunities of our solutions utilizing Cubic’s market leadership and international presence.”
For full calendar year 2019, GRIDSMART is anticipated to contribute approximately $35 million in sales and $8 million of Adjusted EBITDA. San Diego-based Cubic anticipates the transaction will be accretive to cash earnings per share (EPS) in the first full year of operations, exclusive of transaction fees. Cubic will finance the transaction from its existing credit facilities.
“GRIDSMART’s industry-leading video tracking solution at the intersection is a key addition to our growing Intelligent Traffic Management portfolio to reduce congestion,” said Bradley H. Feldmann, Chairman, President and CEO of Cubic Corporation. “It is complementary to our recent acquisition of Trafficware.”
Matt Cole, President of Cubic Transportation Systems, added further “color” to the acquisition. “Detection is the largest and fastest growing segment within the intelligent traffic management market and is critical to enabling smart intersections that can optimize the flow of people and goods through cities, which is core to the Operations and Analytics pillar of the NextCity vision,” he said. “This strategic investment in GRIDSMART will not only enhance our growth profile through synergies with Trafficware but also strengthen Cubic’s Surface Transport Management solution offering.”
Click here to read yesterday’s news release on the acquisition.