Purchase boosts Itron’s clout, work force

When Itron Inc. completes its purchase of a competitor’s electric-meter manufacturing and sales business later this month, it will transform the Spokane company into one of the area’s largest for-profit companies.

Itron, which makes equipment and provides software services for the utility industry, is buying a division of Schlumberger Limited. Federal antitrust officials said Thursday the deal will close later this month. The acquisition will add roughly 850 to 900 people to Itron’s work force. Most of those will remain in South Carolina, where Schlumberger has its meter-manufacturing division. A handful of jobs may be moved from South Carolina to Spokane, said Itron Vice President of Investor Relations Mima Scarpelli.

Itron now has 1,450 workers worldwide, with about 575 of them at its Spokane headquarters. The purchase will lift Itron’s worldwide head count to above 2,300 people, said Scarpelli.

“We’ll be a much healthier company and a much stronger company, and that’s good for Spokane,” she said.

Spokane largest employer is Fairchild Air Force Base, which has more than 5,500 people. That number includes more than 4,500 military personnel.

The largest non-government employer is Sacred Heart Medical Center, with nearly 3,300 full-time workers.

The largest private-sector employer based in Spokane is URM Stores. Its head count is about 2,500 workers, with 1,500 in Spokane and the rest in its distribution facilities and supermarkets in Oregon, Eastern Washington, North Idaho and western Montana. Many of those jobs, said a URM spokeswoman, are part-time or weekend jobs in the company’s Rosauers supermarkets.

Sterling Bank and Trust FSB, after its recent merger with an Oregon savings and loan, currently is Spokane’s second-largest for-profit employer based on head count. Its headquarters here and regional branches have more than 1,600 workers, a bank spokeswoman said.

Itron began its effort to acquire Schlumberger’s electric-meter manufacturing division in 2003. Last year the companies announced Itron would pay about $250 million to take over its competitor’s production and sales unit. Federal antitrust officials spent several months reviewing the purchase before indicating this week the deal could conclude. As part of the agreement, Itron has to license some of its radio-frequency data collection technology to a Minnesota competitor.

Schlumberger’s electric-meter division generated revenues of $229 million in 2002 and $294 million last year, according to company filings. Nearly all of those Schlumberger sales were to electric power utilities. Itron sells to electric utilities but also provides services and data-measuring devices to the natural gas and water utility industries.

Itron generated $317 million in revenue last year.

“With the Schlumberger acquisition, we are almost but not quite doubling the size of the company,” Scarpelli said, referring to total revenue.

Itron Chairman and CEO LeRoy Nosbaum has said he anticipates growth by the company over the next five years to push Itron to the $1 billion level.

Schlumberger is the leading manufacturer of residential electricity meters in the United States. Itron produces handheld devices that use radio antennas to collect data from a variety of meters, including those made by Schlumberger.

Over time, Itron officials saw the industry moving toward production of electric meters that were designed from the ground up to send and receive data from nearby devices. That would have left Itron losing a large share of its market, Nosbaum said.

Scarpelli said the acquisition should not pose complex problems of transition and assimilation. The long waiting period while FTC officials scrutinized the deal left both companies plenty of time to assess ways to manage the purchase, she said.