Vancouver-based alternative fuel technology company Westport Innovations Inc. (TSX:WPT; NASDAQ: WPRT) has announced a US$117.2 million deal to buy fuel system provider Emer S.p.A. of Brescia, Italy.
The deal will cost Westport US$39.6 million in stock and cash, plus the assumption of approximately US$77.6 million in debt with Emer.
Emer provides fuel systems in the compressed natural gas (CNG) and liquefied petroleum gas (LPG) industries.
According to Westport’s announcement this morning, the two companies’ operations will combine under Westport’s Juniper Engines business to offer a complete systems solution to original equipment manufacturers (OEM) in the alternative fuel market.
“The rationale for this acquisition is clear,” Juniper Engines president Ian Scott said this morning in a conference call.
“They have new OEM relationships, as Emer directly supplies and has technology co-development agreements with leading OEMs that include Fiat and Volkswagen. They have complementary markets as Emer is strongly positioned in such countries as Italy, Germany and India, complementing our current strength in China, Russia and Venezuela.”
Scott added that Emer is a technology leader in high-pressure CNG components, brings complementary products and will create sales synergies.
According to Westport, Emer’s key highlights include:
- a leading market position in high pressure natural gas components;
- longstanding relationships with leading global OEMs, including Fiat and Volkswagen; and
- an established presence in key emerging markets, including Eastern Europe, India and Latin America; and more than 100 patents in CNG and LPG systems and components.
The transaction is expected to close July 1 and is subject to a number of closing conditions, including regulatory approval from the TSX.
At press time, Westport stock was down 10% to $20.51.
Jenny Wagler
Twitter: JennyWagler_BIV