Adesto Technologies announced that it would pay $45 million for Santa Clara, California-based Echelon to expand into short-range networks that connect, control and monitor devices used in manufacturing, building and lighting systems. Buying Echelon plays into Adesto’s plans to sell more components and software for the industrial Internet of Things market.
“Following the acquisition of Echelon, we will be able to provide not only semiconductors, but also powerful software and deep systems and solutions expertise for industrial systems and enterprise automation,” said Narbeh Derhacobian, Adesto’s chief executive officer, in a statement. Echelon’s local networking technology is used in an estimated 140 million devices to support real-time control applications in buildings and factories.
The calculus is that the deal will reduce Adesto’s dependence on commodified chips for revenue and fatten its margins. That was also the strategy with its acquisition of S3 Semiconductors, which gave it handholds in the mixed-signal and radio frequency chip markets. The transaction is projected to close in the third quarter. Echelon will become one of Adesto’s business units.