Westport acquires Volvo natural gas fuel supplier for US$7.6 million
Deal expected to earn Westport an extra $1.5 million
VANCOUVER—Westport Innovations Inc. has acquired the supplier of natural gas fuel systems to Volvo Car Co. in a deal worth US$7.6 million.
Westport, a developer of natural gas engines, says the acquisition of Alternative Fuel Vehicle Sweden AB (AFV)—with 2010 revenues or about $6.2 million— “creates strong synergies” for Westport’s light duty division.
The purchase price consists of a closing amount of $3.1 million, of which US$2.1 million is payable in cash, and $1 million in Westport shares.
Westport also assumes AFV’s existing debt of approximately $1.2 million and will repay a $400,000 shareholder loan to Goteborg Energi.
Natural gas technology is playing an increasingly important role in European automotive markets both from an environmental and economic standpoint, says Ian Scott, president of Westport light duty.
“We have seen steadily growing demand in Sweden, particularly from corporate and fleet customers,” he says. “As fuelling infrastructure continues to expand and more automakers offer natural gas options, we expect to see that trend to continue across Europe.”
Founded in 2009 by a team of former Volvo employees, AFV builds and installs the natural gas systems at facilities inside Volvo’s main production centre in Goteborg, Swe.