Westport Innovations Inc. and Fuel Systems Solutions, Inc. announced that they have entered into a merger agreement to create a new alternative fuel vehicle and engine company with an expanded product and technology range.
The consolidation is an effort to combine the expertise of complementary industries, as the new company’s product development strengths that include passenger cars and heavy-duty trucks.
“The merger of these two organizations, both rich in technology innovation and with proven track records of manufacturing, production and sales, will provide greater breadth of alternative fuel systems solutions as products and development engineering to OEM partners globally,” said David Demers, CEO of Westport, in a Sept. 1 statement.
The new company, Fuel Systems Automotive and Industrial Group, seeks a sturdier global footprint as it expands operations to more than 70 countries, with operational focus in developing the next generation of alternative fuel and engine technologies.
“We expect that the increased scale of products and consolidation of facilities will produce both cost-efficiencies and enhanced products, ultimately creating value for all our customers and our shareholders,” said Demers.
The consolidation, which combines 17 brands in the automotive and industrial application, will result in a collective equity value of $351 million and mutual annual revenues extending from $380 to $405 million projected for 2015.
“We are creating a strong platform for growth in all of our addressable markets from which to best serve our customers. Our combined businesses and brands mean increased scale and relevance both internationally and in the U.S.,” said Mariano Costamagna, CEO of Fuel Systems Solutions.
Westport has produced high-performance, low-emission fuel system and vehicle technologies, with an emphasis of its development and commercialization in the heavy-duty and high horsepower arena. Fuel Systems Solutions, Inc. has been a lead designer, manufacturer and supplier of cost-effective alternative fuel components with experience in light- and medium-duty products for automotive and industrial applications.
“Bringing together these two premier companies in alternative fuel technology combines our technology expertise and long-standing relationships with global OEMs, our strong shared focus on improving profitability and aligns our corporate cultures, creating an ideal fit,” said Costamagna.
The boards of directors for both companies unanimously approved the merger, citing that Fuel Systems Automotive and Industrial Group will possess scale and positioning to compete effectively, along with the ability to grow and deliver strong shareholder returns as markets improve.
Fuel Systems Automotive and Industrial Group will locate its automotive division headquarters in Cherasco, Italy, and its industrial division headquarters in Santa Ana, California. The combined company will trade on both the TSX and Nasdaq under the Westport Fuel Systems name and be will headquartered in Vancouver, Canada.
One of Westport’s closest partnerships is with Cummins Inc., which designs, manufactures, sells and services diesel engines and related technology around the world. The joint venture has produced a number of engines, including the new midrange ISL G engine that was displayed at the STN EXPO in July.
