Clean tech engine-maker Westport Innovations (TSX:WPT; Nasdaq:WPRT) is looking to expand its size and boost revenue with the purchase of a New York-based alternate-fuel components manufacturer.
The Vancouver-based company announced Tuesday (September 1) it plans to acquire Fuel Systems Solutions (FSS) in an all-stock deal that would hand shareholders of the American company 2.129 Westport shares for each of their own stocks.
That works out to $7.54 a share, or else a 10% premium above the closing price of FSS stocks on August 31. Westport shareholders would hold 64% of the company while FSS would hold the remainder.
If the deal were approved, Westport would stay headquartered in Vancouver with CEO David Demers remaining at the helm. Meanwhile, FSS CEO Mariano Costamagna would be nominated for a seat on the board of directors of the merged company.
Based on yesterday’s closing trade prices, the combined company would have a value of $351 million.
Westport, which has not posted a profit since forming in the 1990s, said it expects the merger would create cost savings of $30 million by 2018 and revenue outlook for 2015 would range from $380 million to $405 million.
The company added the merger would allow it to expand its focus from heavy-duty vehicles to the light- and medium-duty products that are FSS’s specialty.
The deal is expected to close in the fourth quarter of 2015.
