Westport Innovations develops of naturalgas engines for commercial vehicles while Fuel Systems Inc produces components and systems for controlling the pressure and flow of gaseous alternative fuels eg propane and natural gas in internal combustion engines

Merger Seeks to Expand Alternative Fuel Engine Portfolio

Sept. 1, 2015
Brings together natural-gas combustion technologies for trucks, cars, industrial engines $351 million combo More opportunities for OEMs Predicts yield cost-efficiencies, product improvements

The merger mood in the automotive supply chain has now touched on the alternative fuel sector: Westport Innovations Inc., the Vancouver-based developer of natural-gas engines for commercial vehicles, has a merger agreement with Fuel Systems Inc. Combining the two companies will give Westport ready access to the automotive and light vehicle sectors, where it intends to expand its natural gas combustion technologies.

Fuel Systems, a New York company, is focused on the automotive and industrial engine sector. It designs and manufactures components and systems for controlling the pressure and flow of gaseous alternative fuels, such as propane and natural gas, used in internal combustion engines.

The merged organization will have a combined equity value of $351 million, and total annual revenues in the range of $380-405 million.

The terms call for a one-for-two, stock-for-stock transaction in which Westport will acquire all of the outstanding shares of Fuel Systems common stock in exchange for 2.129 Westport shares. Directors of both firms have approved the merger. The transaction is subject to regulatory approvals. Pending that, the companies anticipate closing the transaction in Q4 2015. 

The new Westport Fuel Systems will have a new business unit known as Fuel Systems Automotive and Industrial Group.

"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," stated Westport CEO David Demers.

Demers predicted the increased scale of products and consolidated facilities will yield cost-efficiencies and product improvements.

According to Fuel Systems CEO Mariano Costamagna, "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."

About the Author

Robert Brooks | Content Director

Robert Brooks has been a business-to-business reporter, writer, editor, and columnist for more than 20 years, specializing in the primary metal and basic manufacturing industries. His work has covered a wide range of topics, including process technology, resource development, material selection, product design, workforce development, and industrial market strategies, among others. Currently, he specializes in subjects related to metal component and product design, development, and manufacturing — including castings, forgings, machined parts, and fabrications.

Brooks is a graduate of Kenyon College (B.A. English, Political Science) and Emory University (M.A. English.)

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