Westport and Fuel Systems Solutions announce merger

2 September 2015

Westport Innovations Inc. and Fuel Systems Solutions, Inc. entered into a merger agreement to create an alternative fuel vehicle and engine company. The transaction will result in a combined equity value of $351 million based on the closing trading prices for the shares of both companies on 31 August 2015 and combined annual 2015 revenues of $380-405 million 2015.

Vancouver, BC-based Westport Innovations has focused the majority of its technological development and commercialization efforts in the heavy-duty and high horsepower natural gas arena. Fuel Systems Solutions, headquartered in New York, is a manufacturer of alternative fuel components and systems—such as propane and natural gas—for use in light- and medium-duty automotive and industrial applications.

The new company will trade on both the TSX and Nasdaq stock exchanges under the name Westport Fuel Systems, ticker symbol Nasdaq: WPRT and TSX: WPT, with a new business unit called Fuel Systems Automotive and Industrial Group.

Westport expects consolidated revenues of between $110 million and $125 million for the year, while Fuel Systems expects consolidated revenue to be in the range of $270 to $280 million for the year, resulting in a combined range from $380 to $405 million projected for the year ended December 31, 2015.

Under the terms of the merger, Westport will acquire all of the outstanding shares of Fuel Systems common stock in a stock-for-stock transaction under which Fuel Systems shareholders will receive 2.129 Westport shares for each share of Fuel Systems common stock they own at closing, representing a 10% premium to Fuel Systems shareholders based on the closing trading prices of Westport’s and Fuel Systems’ shares on 31 August 2015 or an implied value to Fuel Systems shareholders of $7.54 per share. Following closing, existing Westport shareholders will hold approximately 64% of the combined company and Fuel Systems shareholders 36% of the combined company on a fully diluted basis.

The transaction is subject to regulatory approvals, as well as an approval by the shareholders of both companies.

Source: Westport