Natural gas engine maker Westport Innovations to buy rival Fuel Systems

MarketsAssociated Press

Westport Innovations, the Canadian maker of truck engines that run on natural gas, said Tuesday that it plans to expand into making alternative-fuel engines for cars and construction equipment by buying Fuel Systems Solutions.

Shareholders of New York-based Fuel Systems will receive 2.129 Westport shares, or about $7.54 per share at Monday's closing price, for each share of Fuel Systems they own. That would make the deal worth about $136.4 million.

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Westport shareholders will own about 64 percent of the combined company and Fuel Systems shareholders the remaining 36 percent. Westport CEO David Demers will lead the combined company and Mariano Costamagna, who is retiring as CEO of Fuel Systems, will advise the company.

The combined company will have 2015 revenue between $380 million and $405 million, the companies said.

Shares of Westport Innovations Inc. fell 17 cents, or almost 5 percent, to $3.37 in afternoon trading Tuesday. Shares of Fuel Systems Solutions Inc. fell 22 cents, or 3.2 percent, to $6.63.