Canadian smart grid technology firm Tantalus Systems has acquired California-based Congruitive to accelerate the digitisation of the electrical grid.

The purchase price includes $8m of closing consideration and up to $5m through a two-year earn-out. Congruitive will become a wholly owned subsidiary of Tantalus’ US operating subsidiary.

Congruitive is leveraging multi-decade relationships with utilities through its substation automation expertise to deliver its signature software, Congruence.IQ (C.IQ), which is a platform that enables the interoperability of a wide range of devices through an emerging IEEE standard.

With C.IQ, a utility’s smart grid deployment can operate as one intelligent, interoperable system, with the necessary scalability and flexibility as more electric vehicles and distributed energy resources (DERs) are deployed at the edge of the grid. Congruitive is selling its C.IQ software to investor-owned utilities, smart meter vendors and renewable power integrators.

“This acquisition serves as a further demonstration of Tantalus’ purpose-driven mission to help utilities become sustainable from an enhanced financial, operational and environmental perspective,” said Tantalus CEO Peter Londa. “Having C.IQ allows us to help public power and electric cooperative utilities prepare for the impact that an increasing number of EVs and roof-top solar panels will have on the reliability of their distribution grids. We are delighted to announce the closing of this acquisition today, and we welcome Congruitive’s employees, customers and partners to Tantalus.”

At a recent Tantalus users conference, representatives from over 100 public power and electric cooperative utilities reiterated they are under increasing pressure to maintain operations despite disruptions from extreme weather, mandates to decarbonise, and the meteoric rise of EVs, solar panels and other DERs. Despite these disruptions, utilities are called upon daily to deliver safe, reliable and affordable services, while relying on legacy distribution grids that are challenged to respond to changing dynamics.

Tantalus’ Tunet smart-grid platform helps utilities address these problems by letting them monitor, control and respond to events anywhere and at any time across their distribution networks. With the addition of Congruitive and C.IQ, Tantalus will be able to help utilities leverage data through a growing suite of software capabilities to improve the services delivered to their communities.

“This acquisition is an important milestone and will provide value to our customer base,” said Congruitive CEO Kenneth Munson. “As utilities digitise their distribution grids, providing interoperability of data from disparate devices is critical to maintaining reliable and expanded services. Tantalus’ ability to access granular data and deliver next-generation analytics through Tunet coupled with our ability to transport and integrate data from distribution automation equipment and DERs will lead to an even greater range of solutions for the utility industry and, as part of Tantalus, C.IQ will have greater reach into the public power and electric cooperative utility segment.”

Tantalus agreed to acquire 100% of the issued and outstanding common shares of Congruitive pursuant to the terms of a stock purchase agreement. The purchase price was comprised of $8m of closing consideration in the form of approximately $3.5m in cash, 869,565 common shares of Tantalus and the assumption of certain debt on Congruitive’s balance sheet at the time of closing. In addition, Tantalus agreed to include an earn-out provision of up to an additional $5m in the form of cash and common shares of Tantalus.

The earn-out is tied to Congruitive increasing its annual revenue up to $6.9m by 2023. Congruitive delivered approximately $2.5m in revenue from software and services in 2021.

Congruitive’s management team will remain in place and report into Tantalus.

“We are excited to become part of the Tantalus family,” said Congruitive founder and chairman Douglass Campbell. “Congruitive has always been a company that cares deeply about the success of our customers. Tantalus is the right fit culturally, technologically and operationally. Together, we look forward to helping utilities everywhere take full advantage of the data available to them, digitise the electric grid and better serve their communities in a rapidly changing world.”