ELON : ECHELON CORP (NASDAQ)Today's Echelon Announcement
PALO ALTO, Calif.--(BUSINESS WIRE)--May 10, 2000--Echelon Corporation (Nasdaq: ELON) and Enel SpA have announced today that they have signed a non-binding memorandum of understanding under which Enel will integrate Echelon's LonWorks(R) system into its digital meter project. Enel will provide electricity digital meters and a complete home networking infrastructure to over 27 million Italian households over a three-year period. Under the terms of the proposed agreement, Enel will also purchase 3 million shares of newly issued Echelon common stock. Answers to some background questions about what was announced today follow.
Q1. What is the status of the definitive agreement?
A1. Enel and Echelon are negotiating two definitive agreements, one agreement for Enel's purchase of three million shares of Echelon's common stock and a separate agreement relating to the products and services that will be used in Enel's Contatore Elettronico system. The companies expect to complete these agreements in June.
Q2. What are the proposed terms of the common stock sale, including the price?
A2. The parties are still negotiating the stock purchase agreement and it would be premature to discuss all of the terms at this time. However, under the terms of the memorandum of understanding, Enel's purchase price for the shares would be 110% of the average closing trade price for Echelon's Common Stock on the NASDAQ National Market for the ten (10) trading days ending on the trading date prior to the closing date; provided that such price shall be no greater than $43.6425 and no less than $29.0950, a reference range centered around 110% of the closing trade price for Echelon's Common Stock on the NASDAQ National Market at the signing of the memorandum of understanding.
Q3. What is the Contatore Elettronico system?
A3. Contatore Elettronico is the name of Enel's ongoing project that includes a remote meter reading system, a customer management system, and a value-added services delivery system. In particular, the Contatore Elettronico includes an innovative system to remotely read and manage the domestic consumption of energy. The system includes remotely controllable electronic meters in each home and building, data concentrators located in medium voltage/low voltage substations that feed power to the homes and buildings, and central servers in which the network data bases are located. Under the proposed agreement, signaling between the data concentrators and the electronic meters will be implemented over the existing electrical wiring using Echelon's power line transceivers. A telecommunications network will be established for signaling between the central servers and the remote data concentrators.
Q4. How many homes and businesses would be connected to the Contatore Elettronico system?
A4. While the parties have not yet entered into a definitive agreement, it is expected that approximately 27 million homes and businesses will be connected to this system.
Q5. If the parties enter into a definitive agreement, what is the approximate value of Echelon's products that will be used in the Contatore Elettronico system?
A5. While the parties have not yet entered into a definitive agreement, it is anticipated that more than $300 million of Echelon products will be used in the Contatore Elettronico system over the three-year deployment period.
Q6. When will the deployment of the Contatore Elettronico system begin?
A6. The parties expect significant deployment to start in calendar year 2001.
Q7. Which Echelon products will be used in the Contatore Elettronico system?
A7. If the parties enter into a definitive agreement, this project will use Echelon's PLT-22 power line communications technology for communications to the home and within the home. The devices in this network will be managed by Echelon's LNS(TM) software running on the central servers. The system will include additional products supplied by Echelon, including, among others, data concentrators located in the electrical substations.
Q8. What are examples of value-added services that could be performed by this system?
A8. The initial set of planned services include remote meter reading, demand side management, and remote connection/disconnection of meters. There are many other potential value-added services that could be deployed on the Contatore Elettronico infrastructure over time, such as security monitoring, remote diagnostics for electrical appliances, and remote control of residences.
Q9. Does the Contatore Elettronico system provide services that are unique to Italy or could this system architecture be deployed in other countries, too?
A9. The services that Enel plans to provide in Italy are the same types of services required by utilities and telecommunications companies in countries throughout the world -- and the same LonWorks system infrastructure can be applied to these countries as well. This provides a unique opportunity for appliance manufacturers, consumer electronics companies, heater manufacturers, alarm system suppliers, and other manufacturers to design to a common platform -- Echelon's LonWorks system -- for deployment to markets throughout the world.
Echelon, LonWorks, LonMark, the LonMark logo, Neuron, and the Echelon logo are trademarks of Echelon Corporation registered in the United States and other countries. LNS is a trademark of Echelon Corporation. Other marks belong to their respective holders.
This press release may contain statements relating to future plans, events or performance. These forward-looking statements are based on the beliefs of the management of ENEL and Echelon as well as on assumptions made by and information available to these companies at the time these statements are made. Such statements may involve risks and uncertainties, including the risk that the definitive agreement is not reached after negotiation, that any required regulatory approval are not obtained, that the transactions contemplated are challenged by third parties and other risks identified in ENEL's and Echelon's SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Neither ENEL nor Echelon undertake any obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
--------------------------------------------------------------------------------
Contact:
Echelon Corporation
Press:
Lyn Balistreri, 650/855-7402
lbalistreri@echelon.com
or
Investor Relations:
Chris Stanfield, 650/855-7443
stanfield@echelon.com
All Headlines
Additional Headlines
BW 05/10 05:34 Background Information for Today's Echelon Announcement
BW 05/10 05:29 Enel and Echelon Sign Preliminary Agreement to Network 27 Million Italian Homes
BW 05/04 09:07 Echelon and Sun Microsystems Form Alliance to Connect LONWORKS Networks with Java Technology Services Companies Collaborate on Joint Marketing Efforts
BW 05/04 09:00 Echelon Presents Diverse Applications for the Digital Home at CONNECTIONS 2000
Enter symbols or keywords for search Symbol lookup
QuotesStock TalkChartsNewsPeople
SI NavigationHomeSite Map------------------CustomizeFAQFREE RegistrationMarket InsightMarket ToolsMembership Sign-UpMessage CenterNetSearchPeopleMarksPeopleSearchPortfolioQuotesReal-Time QuoteStock ScreenerStockTalkStockTalk SearchSubjectMarks
Go to Top
Copyright ¸ 2000 Business Wire
Got a comment, question or suggestion? Contact Silicon Investor. |
