May 26 2016
Uponor Corporation and Belkin International, Inc. announced today their intention to form a partnership to pioneer in the development of water sensing and conservation technology for buildings.
The new partnership – to be called Phyn - aims at developing products for the emerging intelligent water market, both for consumers and professional customers. Closing of this partnership agreement is expected to happen during July 2016, subject to regulatory approvals and other customary closing conditions.
Uponor and Belkin have agreed to establish two joint venture companies. The first one will operate in the U.S. and the second one in Europe, at a later stage. Uponor will initially invest $15 million in exchange of a 37.5% shareholding in the companies. The investment will impact Uponor’s cash flow in the second quarter 2016 but it has no impact on Uponor’s profit guidance for 2016. As a minority-owned business, the joint venture company will be consolidated into Uponor’s financial accounts using the equity method. The parties have also agreed on a time frame within which Uponor has an option to invest an additional $10 million and increase its shareholding in Phyn to 50%.
Belkin International will initially own 62.5% of the partnership. Belkin will transfer its related technology, intellectual property, staff, and other non-monetary assets to Phyn. The U.S. joint venture company will be headquartered in the Los Angeles area with a research and development lab in Seattle. A number of Belkin engineers will transition to the new Phyn team.
“For Uponor, Belkin is a leading global partner in water sensing technology, and our joint target is to develop unique new products for the intelligent water market, which is gradually emerging in step with the development of new, affordable and user-friendly digital technology. The joint venture is perfectly aligned with Uponor’s strategy of growth in the emerging Internet of Things (IoT) market and represents a major step in digitalisation for us,” says Jyri Luomakoski, President and CEO, Uponor Corporation.
“This investment and our partnership with a leading IoT company significantly accelerates our efforts to make plumbing systems more intelligent,” Luomakoski continues.
This joint venture is a partnership between two companies, each leaders in their respective fields. Phyn will be a standalone company featuring Belkin’s proprietary water sensing technologies, expertise in data science and the Internet of Things and will also offer agile product design, consumer insights and a global retail channel. Uponor will bring its leading position in plumbing expertise, professional insights from the trades and a global wholesale distribution channel.
Chet Pipkin, founder and CEO of Belkin comments: ”With the creation of Phyn, we’re bringing water up to speed with the rest of the smart home, helping to not only protect consumers’ homes and wallets, but also do our part to solve the very real challenges facing our global water supply.”
Uponor regards the joint venture company as an important step in its growth strategy as it aligns ideally with the company’s commitment to help create safe and sustainable buildings and infrastructures by providing comprehensive plumbing, indoor climate and infrastructure solutions.