Westport Innovations Inc. (Nasdaq: WPRT) and Fuel Systems Solutions Inc. are merging in a $351 million deal.
Westport, headquartered in Vancouver, develops alternative-energy technology, including natural gas engines and vehicles.
Fuel Systems designs, manufactures and supplies alternative-fuel parts and systems for transportation and industrial markets. The company owns the BRC, Zavoli and TA Gas Technology and other brands.
The New York-based company had started restructuring after tough economic conditions in Italy and Argentina affected sales volumes, which combined with lower oil prices and increased competition, started to affect the business’ bottom line. The group had been exploring strategic alternatives, according to Mariano Costamanga, Fuel Systems CEO.
Combined, the merged business expects to have complementary product offerings, a larger global footprint and more efficient operations. The transaction brings 17 automotive and industrial brands into one business.
Under the terms of the deal, Westport will exchange 2.129 shares of its own stock per each Fuel Systems share. After the deal closes, Westport shareholders will own 64 percent of the combined company, with Fuel Systems shareholdings holding 36 percent.
Willkie Farr & Gallagher LLP represents Westport Innovations.
Dealmakers are expecting crude oil price volatility to result in more M&A transactions, according to Mergers & Acquisitions Mid-Market Pulse, a forward-looking sentiment indicator derived from monthly surveys of approximately 250 executives and published in partnership with McGladrey LLP. For more, see Despite Dropping Fuel Prices, Hopes Rise for Energy Deals