 Chilliwack’s IMW Industries Ltd., which makes and services equipment for natural gas fuelling stations and commercial fleets, has been acquired for $125 million plus a cash earn-out arrangement by a U.S. competitor whose majority owner is oil tycoon T. Boone Pickens.
Clean Energy Fuels Corp. (Nasdaq:CLNE), a California company that owns about 200 natural gas refuelling stations in the U.S., said its acquisition of IMW will help drive expansion of the global natural gas vehicle market.
The purchase price includes $75 million to be paid at closing ($15 million in cash and approximately $60 million in Clean Energy common stock) plus four additional annual payments of $12.5 million each. The earn-out arrangement will pay IMW’s shareholders certain percentages of future gross profits earned by IMW over the next four years up to a maximum of $40 million providing it exceeds certain minimum thresholds.
Clean Energy Fuels has existing ties to B.C. It was formed in 2000 through the merger of Pickens Fuel Corp. and BCG eFuels, the latter of which was a joint venture of Westport Innovations Inc. (TSX:WPT) and Terasen Gas.
Pickens, the Texas billionaire oilman turned alternative energy proponent, once owned more than 10% of shares in Vancouver’s Westport, which makes natural gas engines. Clean Energy Fuels’ president and CEO Andrew Littlefair is a Westport director and minority shareholder. In turn, Westport is a minority shareholder in Clean Energy Fuels. Littlefair said in a statement that IMW is a world leader in compression technology with an emphasis on growing markets in China, Southeast Asia and South America. “During the economic slowdown of the last couple of years, while other companies were retrenching, IMW aggressively expanded its sales and service organization.” He said the success of that strategy is demonstrated by the IMW’s recent deal with China Gas to build 120 large-scale compressed natural gas (CNG) stations in China. IMW will operate independently as a subsidiary of Clean Energy once the acquisition closes, which is expected to occur in the third quarter. Pickens is aggressively lobbying for U.S. legislation that could accelerate the market for natural gas-powered vehicles. (See “Vancouver-based natural gas engine maker gets the T. Boone Pickens bump” – issue 1069; April 20-26, 2010.)
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