Landi Renzo has signed an agreement with Clean Energy Fuels for the merger between SAFE and Clean Energy Compression. The agreement sets up a new leading Group in the compression segment with operational headquarters in Italy and an estimated turnover of approximately €58 million at the end of 2018 (around €107 million at the end of 2022).
The industrial project envisages the creation of a new commercial entity (“Newco” – 51% Landi Renzo and 49% Clean Energy Fuels) operating from the beginning of January 2018. The Newco will focus on compressors for CNG and Renewable Natural Gas (RNG) at a global level; with a market share above 15% in Europe and the United States, which Landi Renzo says ranks it second internationally.
Landi Renzo, a worldwide gas components and systems supplier for the motor vehicles sector, says it has signed a strategic agreement for an industrial project that aims at the merger between its subsidiary SAFE, specialized in the manufacturing and installation of gas compressors for multiple applications, and Clean Energy Compression, owned by the US company Clean Energy Fuels Corp., a single-source supplier of Compressed Natural Gas (CNG) fueling systems, including compressors, dispensers, gas control and storage systems for vehicle applications and bulk CNG transportation.
Headquartered in San Giovanni Persiceto (BO), the Newco’s governance will consist of a Board of Directors that would be made of 7 members, out of which 4 shall be appointed by Landi Renzo. Cristiano Musi, CEO of Landi Renzo, will hold the same position also in the Newco, whereas Andrew J. Littlefair, CEO of Clean Energy Fuels Corp., will be appointed non-executive Chairman.
Uniting the expertise of both companies, the Newco will meet the growing needs of customers within a sector that will fast expand in the next years. This expansion is in part due to the strict environmental policies which worldwide require a progressive adoption of alternative fuels to minimize polluting emissions. The expansion of a more ‘capillaried’ infrastructure network for the dispensing of methane gas – and also of the newer and greener biomethane – is the first step towards the spreading of these refueling technologies.
Comments
“Since SAFE became part of the Landi Renzo Group in 2012, it has grown to become an Italian excellence that makes us particularly proud. The historic headquarters based in San Giovanni in Persiceto will become the focus of the activity of the new Group, which is a result of the aggregation with an important American player. This deal will enable us to strengthen our presence on international markets by maintaining an Italian DNA,” said Stefano Landi, Chairman of Landi Renzo.
Cristiano Musi, CEO of Landi Renzo, said: “This agreement is part of the process of growth and development of our Group, with a focus on the strengthening of our leadership position in our strategic segments, as well as on the acceleration of the value creation process. We believe that the methane and biomethane distribution industry will be more and more strategical for our reference market. Becoming majority shareholders of the second player in this business at a worldwide level represents an acceleration in the value creation process”.
“Safe and Clean Energy Compression’s businesses have been competing so far, but, when combined, they establish a completely complementary structure in geography, expertise and highly competitive products” said Andrew J. Littlefair, President and CEO of Clean Energy. “By consolidating operations and corporate functions, the Newco will be able to drive manufacturing efficiencies and reduce redundant costs, resulting in improved margins”.
Complementary Compression Product Range
The industrial plan of the Newco is based on two main pillars:
- turnover increase, with an optimization of the product range and an increase of the offer in some markets;
- operative efficiencies and synergies of costs.
The Newco will be characterized by a global sales network, deriving from the integration of the two largely non-overlapping existing networks. As regards products offer, optimizations are foreseen in the product range of mid power compressors – an area in which CEC has already completed the standardization process – as well as a better offer to CEC clients of low power compressors, dryers, and integrated solutions, which have always been a strength of SAFE. The new entity is also meant to give value to the RNG product range of SAFE, which completes the offer of CEC in North America, one of the most promising markets for the biomethane, thanks to the regulations on green house gas emissions.
Source: Landi Renzo S.p.A. and Clean Energy
