Immediately Expands US Automotive OEM Market Penetration
Fuel Systems Solutions, Inc. (FSYS), a designer, manufacturer and supplier of alternative fuel components and systems for use in transport applications, has entered into a definitive agreement to purchase Productive Concepts International LLC (PCI)’s alternative fuel vehicle business for a transaction value of $11.1 million including $975,000 in assumed debt.
The transaction is structured as an asset purchase and is expected to close within 30 days subject to customary closing conditions, including customer consents. PCI is expected to operate as a subsidiary of IMPCO after closing, led by PCI’s existing management team.
Based in Union City, Indiana, PCI is a specialized vehicle modification and value-added systems integrator for a variety of alternative fuel applications including hybrid, CNG, propane and dual-fuel diesel. Most recently, PCI was selected by General Motors as its supplier of CNG fuel delivery and storage systems for the Chevrolet Express and GMC Savana vans.
As part of the transaction, Fuel Systems Solutions has agreed to provide PCI with a secured loan, which will be used to retire certain liabilities and fund capital expenditures prior to closing. At closing, the seller will receive $6.125 million in cash subject to adjustments, with an additional cash payment of $4.0 million payable upon achievement of a system installation volume milestone. Further performance payments of up to $20 million in Fuel Systems Solutions stock may be made in the future based on achievement of 2011 and 2012 revenue targets.
“Development of the North American market for alternative fuel vehicles has begun to accelerate as OEMs increase their commitments to offer and support alternative fuel versions of key vehicle platforms,” said Mariano Costamagna, chief executive officer of Fuel Systems Solutions. “The addition of PCI establishes our leadership position in this evolving market.”
Matthew Beale, president, chief financial officer and secretary of Fuel Systems Solutions, said, “The strategic fit between PCI and IMPCO is excellent. The combined business will be positioned to offer OEM and fleet customers a fully-integrated package including systems and vehicle modification. We see PCI as a platform for delivering the DOEM model we have deployed successfully internationally in the growing North American market. This transaction clearly demonstrates our commitment to building the leading alternative fuels platform in the North American market.”
Item compiled using information from a Fuel Systems Solutions, Inc. press release.
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