He once sold newspapers but a career switch has been lucrative for Cameron O'Reilly and some rich chums, write Su-Lin Tan and Michael West.
The roll-out of smart meters in Victoria may have been costly for consumers but it has proven an impressive money spinner for a handful of Australian entrepreneurs.
Cameron O'Reilly, the scion of the Heinz food empire and former chief of media group APN, along with John B. Fairfax, the Smorgon family and Kerry Stokes are a few of the high-profile names to have made a killing from the sale of smart meters. They were major shareholders of Landis & Gyr, which amassed 56 per cent of the market in deals to supply the electricity distributors in Victoria. Their big payday came in 2011 when O'Reilly sold Landis & Gyr to Toshiba for $US2.3 billion ($2.2 billion).
An investigation by BusinessDay has found Australians have been paying roughly twice the amount for smart meters than consumers in the US and Europe. Further, there has been poor transparency in the process even though the metering devices had been mandated by the government.
That the costs of the roll-out in Victoria have already blown out from $800 million to $2.3 billion presents a salutary warning to NSW which is now deliberating on a roll-out of its own, albeit optional rather than compulsory.
The success of Landis & Gyr has confirmed O'Reilly as one of the most savvy businessmen in Australia. The O'Reilly family had controlled regional media group APN and just as the fortunes of old media were about to take a battering last decade, O'Reilly was already moving deftly into a new space.
He started with Bayard Capital in 2002, garnering seed money from friends and business acquaintances. Kerry Stokes and JB Fairfax pitched in $20 million apiece, and the Smorgon family another $5 million. O'Reilly soon sold two thirds of his APN shares and chipped in a further $5 million.
He raised $100 million in seed capital, then Bayard went on a $1.5 billion spending spree, acquiring Landis & Gyr, a Swiss company and metering industry leader .
The Toshiba sale made Bayard's seed investors a handsome multiple of their investment, although it is only possible to piece together estimates of profits from the public materials.
The Fairfax family would make roughly $203 million, through Marinya Holdings, and the Smorgon family's Escor Investments, $36 million. John Curtis, former chairman of St George Bank, made $24 million and the private equity group Propel Investments some $405 million.
Propel and Curtis came on board through a series of capital raisings before the Toshiba sale.
Other shareholders in Bayard were Temasek Holdings, the investment arm of the Singapore government, the former Lion Nathan chairman Doug Myers and fashion designer Carla Zampatti.
Once O'Reilly had acquired Email Metering, the Enermet Group of Finland, Hunt Technologies and Cellnet Technologies in the US, and Landis & Gyr, Bayard was the number one player in the world market.
Landis & Gyr, to which Bayard then changed its name, dominated Victoria and managed to fetch perhaps the highest prices in the world for its devices.
According to eMeter Corporation, a meter data intelligence department of Siemens, the average cost of smart meters sold to utility companies in the US is $221, and in Europe $272.
A spokesperson for the Australian Energy Regulator (AER) confirmed the Victorian distribution companies paid an average of $346 to their suppliers. Powercor paid the highest at $423.
Landis & Gyr meters are widely used across the US and Europe. It is the sole supplier of the E350 model to SP Ausnet and has a contract to supply 80 per cent of Citipower and Powercor's E350 smart meters.
A spokesman for Citipower and Powercor said that there were at least 32 respondents to the tenders. It was a "highly competitive process" with 16 detailed proposals lodged, according to Citipower and Powercor.
Landis & Gyr's PR firm claimed the prices negotiated in Victoria could not be compared to those overseas as specifications changed from country to country.
The other major supplier of smart meters in Victoria is Secure Meters, previously known as PRI Australasia. Secure Meters supplies the i-Credit 500 model. It is headquartered in India.
Last month, the O'Farrell government announced plans for a market-led rollout of smart meters for NSW. One distributor, Essential Energy, said it had been reviewing Landis & Gyr and Secure Meters as potential suppliers.
As crunch time approaches for power consumers in NSW the state would do well to deliver a more transparent and accountable outcome - and of course a lower price, seeing it is the customer who has to pick up the cost while the greater benefits, according to most independent observers, fall to the distributors rather than the customers.
Frequently Asked Questions about this Article…
How did investors make big profits from Victoria's smart meter rollout?
Investors who backed Bayard Capital — which acquired global meter maker Landis & Gyr and other metering businesses — profited when Bayard sold Landis & Gyr to Toshiba in 2011 for about US$2.3 billion. Seed investors who funded Bayard realised large returns, with some public estimates in the article showing payouts to groups like Marinya Holdings (Fairfax) and Propel Investments.
Which companies dominated the Victorian smart meter market and why does that matter for investors?
Landis & Gyr dominated Victoria (about 56% market share) and was the sole supplier of the E350 model to SP Ausnet and a major supplier to Citipower and Powercor. For everyday investors, market dominance can mean pricing power and higher margins for suppliers, which helped early backers of Landis & Gyr earn substantial returns.
Were Victorian consumers charged more for smart meters than customers overseas?
Yes. The article reports the Australian Energy Regulator said Victorian distributors paid an average of $346 per meter (Powercor paid $423), compared with average meter costs of about US$221 in the US and US$272 in Europe — roughly twice the cost in some international comparisons.
What transparency and cost concerns should investors watch when governments mandate infrastructure like smart meters?
The article highlights poor transparency in Victoria’s procurement process and a large cost blowout (from an initial $800 million estimate to $2.3 billion), which signals policy and execution risks. Investors should monitor procurement openness, regulatory oversight, and whether consumer costs are being shifted to households.
How much did the Victorian smart meter roll-out cost and what does that mean for future rollouts?
According to the article, the Victorian roll-out estimate rose from $800 million to $2.3 billion. For investors, this suggests potential budget overruns and political scrutiny for future rollouts (for example, NSW was considering its own market-led rollout), which can create both risks and opportunities for suppliers and contractors.
Who were some of the notable investors in Bayard Capital and what returns did they see?
High-profile seed investors in Bayard included Cameron O’Reilly, JB Fairfax, Kerry Stokes, and the Smorgon family, with backing from entities like Temasek. Public estimates cited in the article suggest Marinya Holdings (Fairfax) received about $203 million, Escor Investments (Smorgon) about $36 million, John Curtis about $24 million, and Propel Investments about $405 million from the Toshiba sale.
Which other smart meter suppliers operated in Victoria and how competitive was the tender process?
Besides Landis & Gyr, Secure Meters (formerly PRI Australasia, headquartered in India) supplied the i-Credit 500 model. Citipower and Powercor said there were at least 32 respondents to the tenders and 16 detailed proposals, which they described as a 'highly competitive process.'
What should everyday investors consider about smart meter rollouts in other states like NSW?
The article advises caution: NSW was debating a market-led rollout and should aim for more transparency, accountability and lower prices because consumers ultimately bear costs while many benefits accrue to distributors. Investors should watch policy design, supplier selection, and whether rollouts are compulsory or optional, as these factors affect market size and profitability.
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