Westport and Fuel Systems Solutions Sign Merger Agreement
Westport Innovations and Fuel Systems Solutions announced that the companies have entered into a merger agreement to create a premier alternative fuel vehicle and engine company. The combined company will benefit from complementary product solutions, and a fortified global footprint, with efficient operations and a core focus in developing next generation technology. The transaction, which has been unanimously approved by the companies’ respective board of directors, will result in a combined equity value of $351 million.
The merger combines 17 brands in the automotive and industrial space and will allow customers and stakeholders to benefit from the consolidation of technologies, and the expansion of product portfolios, OEM relationships, and global distribution networks. The new entity will conduct business in more than 70 countries, represent a combined 100 years of experience, with a new business unit called Fuel Systems Automotive and Industrial Group.
The transaction is subject to regulatory approvals, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The transaction is also subject to the required approval of both Fuel Systems and Westport’s shareholders. Subject to the satisfaction of closing conditions and receipt of required approvals, the companies anticipate closing the transaction in the 4th quarter of 2015. Westport and Fuel Systems will operate as separate companies until that time.
“The merger of these two organizations will provide greater breadth of alternative fuel systems solutions as products and development engineering to OEM partners globally,” said David Demers, CEO of Westport. “This transaction marks a milestone in our strategic plans, whereby Westport will realize increased sales and significant cost efficiency opportunities while continuing to focus on the development, validation and launch of its proprietary Westport HPDI 2.0 and enhanced spark ignition technology.”
Traditionally, Westport has focused the majority of its technological development and commercialization efforts in the heavy-duty and high horsepower arena, while Fuel Systems has significant experience and focus in the light- and medium-duty products for automotive and industrial applications. The complementary industry expertise provides a compelling rationale for the merger, as the combined company’s product development efforts will span passenger car to heavy-duty trucks to locomotives and marine applications to stationary power.