A global leader in natural gas engines, Vancouver, BC-based Westport Innovations Inc. last Friday said it has acquired a leading conversion company, BAF Technologies Inc., from Clean Energy Fuels Corp., the California-based natural gas vehicle (NGV) fueling company. Westport secured the deal with $25 million worth of its stock.

At the same time, Westport and Clean Energy, which moves into a new Newport Beach, CA, headquarters on Monday, have entered a $5 million joint marketing/sales program. The agreement will allow Westport to provide purchase incentives for fleets, including fuel credits, as part of a commitment by Clean Energy to purchase Westport products.

Westport said the acquisition of BAF and its subsidiary, ServoTech Engineering Inc., will help it create the largest product portfolio and largest market presence in the North American light-duty NGV market. The move allows Westport to “secure its position” as Ford Motor Co.’s largest partner under the qualified vehicle modifier (QVM) program with more than 10 products and about 150 Ford-authorized dealerships.

BAF supports clients with vehicle conversions through the Ford QVM program and aftermarket conversion products, alternative fuel systems, application engineering, service and warranty support. ServoTech offers total engineering services in the conversion space.

“The transaction allows both Westport and Clean Energy to focus on the significant growth opportunities as natural gas emerges as a global fuel for transportation,” a Westport spokesperson said.

The acquisition increases Westport’s product range with Ford to include transit, cargo, shuttle and taxi vehicles and dedicated NGVs for markets such as California. Westport now exclusively installs the natural gas “WiNG Power System” on Ford F-250 through F-550 trucks at its assembly center in Louisville, KY.

“Westport will continue to install the WiNG Power System, and the increased volume of orders expected through BAF will create economies of scale, and the BAF network will allow more flexibility in producing specialty configurations,” the spokesperson said.

Under the joint marketing deal, Westport will pay Clean Energy $5 million in March to cover the joint marketing by Clean Energy during the next two years. Clean Energy will also provide Westport with 750,000 gasoline gallons equivalent of compressed natural gas (CNG), along with providing support for the marketing and sales of Westport products. Clean Energy also has committed to fulfill at least half of its light- and medium-duty NGV commercial vehicle needs from Westport and BAF during the two-year period.

Westport Executive Vice President Ian Scott said BAF, which was established in 1992, has a “strong portfolio” of products and customers that will be strategically valuable to Westport as “natural gas increasingly is seen as a major transportation fuel around the world.” Scott sees the marriage as bringing together BAF’s marketing experience with Westport’s technology and manufacturing expertise.

Clean Energy acquired Dallas-based BAF in 2009 for a cash price of about $8.3 million, and a finance unit of Clean Energy held about $3.8 million of BAF debt at that time.

“We are extremely pleased with our original investment in BAF and the growth it has achieved over the last five years,” said Clean Energy CEO Andrew Littlefair, who added that with the Westport deal his company can now “sharpen” its focus on fueling infrastructure while Westport delivers NGV products.

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