Westport Acquires Dutch Supplier of Propane, Nat-Gas Systems
The acquisition adds propane systems to Westport’s alternative-fuel offerings while also expanding its natural-gas portfolio.
Westport said it completed the transaction through a combination of 6.6 million euros in assumed liabilities and 5.6 million euros in cash.
Prins develops systems that use propane, also known as liquefied petroleum gas, or LPG, as well as compressed and liquefied natural gas, in light-, medium- and heavy-duty applications. It also offers aftermarket dual-fuel systems for diesel engines.
Westport said it will merge Prins’ European operations under its applied technologies business unit.
Mehran Rahbar, executive vice president of on-road systems and applied technologies at Westport, described the acquisition as “a significant opportunity for Westport to scale, innovate and derive sales and operations synergies from the combined business.”
He said Prins’ product line and relationships with original equipment manufacturers will complement Westport’s current operations.
Prins has business in more than 50 countries through OEMs, importers and distributors. Its systems are available for the top six European OEM truck brands, as well as global OEMs such as Hyundai and Kia, Westport said.
The acquired company’s current business in large emerging markets for alternative fuels, such as Turkey and Africa, will enable Westport to bring its products to new markets, the company added.
Westport, based in Vancouver, British Columbia, offers high-pressure direct-injection systems and other natural-gas vehicle technologies. Its joint venture with engine maker Cummins Inc. is the main supplier of natural-gas engines for the North American trucking industry.
Westport said it does not expect the Prins acquisition to have a significant effect on its 2014 earnings due to its timing, but anticipates that it will enhance its earnings in 2015.
For 2013, Prins reported earnings before interest, tax, depreciation and amortization of 700,000 euros, down from 5.3 million euros a year earlier. The company posted 23.2 euros in revenue last year, compared with 29.2 million euros in 2012.
Westport identified propane as a growing market opportunity for the company.
In 2012, there were 1 million vehicles of all sizes across the globe converted to run on propane, Westport said, citing Navigant Research. That market is expected to grow to 1.4 million in new vehicle sales and conversions in 2020, the company said.
In North America, the annual growth rate for all propane vehicle sales and conversions will average 4.7% from 2014 to 2035, it predicted.
Earlier this year, Westport announced it was cutting its global staff by 9% and implementing executive pay cuts after posting a net loss of $25.5 million, or 40 cents per share, in the third quarter.
The company said its quarterly revenue excluding joint ventures fell to $25.3 million from $46.5 million, citing lower oil prices and the discontinuation of the first-generation of its HPDI engine technology last year.
