Seal Beach, CA-based Clean Energy Fuels Corp. and privately held IMW Industries Ltd. announced Wednesday they have signed a definitive agreement for Clean Energy to acquire IMW for $125 million, plus a cash earn-out arrangement. IMW makes fueling compressors and related equipment used in stations developed by Clean Energy and its clients.
The companies said they expect to close the sale in the third quarter. IMW will maintain separate operations as a Clean Energy subsidiary.
Vancouver, BC-based IMW has supplied more than 1,000 fueling installations in 20 countries, including ones in the United States operated by Clean Energy. It maintains manufacturing facilities in Canada and Shanghai, China. Clean Energy CEO Andrew Littlefair called IMW a "world leader in compression technology."
Clean Energy said the purchase price includes $75 million to be paid at closing ($15 million in cash and about $60 million in Clean Energy common stock), along with four additional annual payments of $12.5 million each (consisting of $5 million in cash and approximately $7.5 million cash or common stock at Clean Energy's option).
Under the earn-out arrangement, IMW shareholders will be paid certain percentages of future gross profits at the company during the next four years, assuming the gross profit exceeds certain minimum thresholds and up to a maximum of $40 million in the aggregate, Clean Energy said.
Noting that the transaction transforms Clean Energy in terms of its capabilities and geographic reach, Littlefair emphasized that the deal expands his company's market presence to make it "a world leader in natural gas fueling and compression technology." He said Clean Energy is now positioned to expand its presence in both the U.S. and international natural gas vehicle (NGV) markets.
Clean Energy sees rapidly growing markets for natural gas as a transportation fuel 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," said Littlefair, noting that the company recently signed with China Gas to build 120 large-scale compressed natural gas stations with 80 to 90 IMW compressors scheduled to be delivered there in the next 12 months.
Clean Energy has deployed IMW compressors and related equipment for several years in many of the 200 natural gas fueling stations it operates across the United States, the company said.
IMW President Brad Miller said his company will continue to pursue "a major global growth program" as a Clean Energy subsidiary.
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