* Process could result in sale or IPO -sources
* Smart meter makers have been key M&A targets
* Toshiba bought Landis+Gyr in 2011
(Adds context, potential bidders, valuation)
By Christoph Steitz, Arno Schuetze and Oliver Hirt
FRANKFURT/BERLIN/ZURICH, March 2 Japan's Toshiba
Corp is preparing a potential $2 billion divestment of
smart meter group Landis+Gyr, hoping to rake in capital after a
major writedown on its U.S. nuclear unit last month, three
people familiar with the matter said.
The group has hired UBS to explore a potential sale
or initial public offering of the Swiss-based business, which
could take place as early as after the European summer, they
A spokeswomen for Toshiba in Europe declined to comment. UBS
also declined to comment.
Smart meter makers have seen a wave of M&A activity, with
three major manufacturers up for sale in Germany alone,
highlighting their significance as the energy industry goes
digital and depends on live consumption data to a much greater
Landis+Gyr, in which Toshiba owns a 60 percent stake,
employs more than 5,700 staff and is active in over 30
countries. It said last week that sales would grow by nearly 5
percent to $1.64 billion in the fiscal year ending this month,
adding it was "unaffected by Toshiba's challenges".
Toshiba announced a $6.3 billion writedown on its U.S.
nuclear business last month, wiping out its shareholder equity
and causing it to seek divestments to create a buffer for any
fresh financial problems.
It is expected to approach buyout groups including CVC,
Cinven, Advent, KKR, Blackstone, Onex
and Clayton, Dubilier & Rice as potential buyers of
Landis+Gyr, one of the sources said, adding that industrial
conglomerates were not expected to enter the fray.
Toshiba bought Landis+Gyr in 2011 for $2.3 billion jointly
with state-backed Innovation Network Corporation of Japan
(INCJ), which holds the remaining 40 percent in the company.
The deal would value Landis+Gyr at 10-11 times its annual
core earnings (EBITDA), two of the people said, in line with the
10.7 times that U.S. water technology company Xylem paid
for Sensus USA Inc last year.
Toshiba will try to position Landis+Gyr as a Swiss
industrial group, hoping to reach EBITDA multiples similar to
those of Geberit, Sulzer or Belimo,
which trade at between 12-19 times.
($1 = 0.9506 euros)
(Editing by Susan Fenton)