SEAL BEACH, CA - Clean Energy Fuels Corp. and IMW Industries Ltd. announced they have agreed to a deal in which Clean Energy will acquire IMW for $125 million plus a cash earn-out arrangement.
California-based Clean Energy is a major provider of natural gas (CNG and LNG) for transportation in North America.
IMW manufactures and services advanced natural gas fueling compressors and related equipment. That equipment, sold to station operators and commercial fleets, has provided more than 1,000 installations in over 20 countries. IMW, a private company, is headquartered near Vancouver, British Columbia, and has a second manufacturing facility near Shanghai, China.
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 (consisting of $5 million in cash and approximately $7.5 million in cash or Clean Energy common stock to be determined at Clean Energy's option).
The earn-out arrangement will pay IMW's shareholders certain percentages of future gross profits earned by IMW over the next four years, assuming the gross profit exceeds certain minimum thresholds and up to a maximum of $40 million in the aggregate.
Completion of the transaction is subject to certain closing conditions being met, including the registration of the Clean Energy shares paid to IMW shareholders at the closing. The companies intend to close the transaction in the third quarter of 2010. After closing, IMW will maintain separate operations as a subsidiary of Clean Energy.
"IMW is a world leader in compression technology with emphasis on the rapidly growing markets in China, Southeast Asia and South America," said Andrew J. Littlefair, Clean Energy president and CEO. "During the economic slowdown of the last couple of years, while other companies were retrenching, IMW aggressively expanded its sales and service organization."
IMW recently signed an agreement with China Gas to build 120 large-scale CNG stations in China, with 80 to 90 compressors related to this agreement expected to be delivered in the next 12 months.
The acquisition transforms Clean Energy both in terms of capability and geographic reach, Littlefair said.
"Our core business of providing fueling services in North America is now integrated with domestic NGV vehicle conversions (from our BAF vehicle technology subsidiary), domestic biomethane production (from our landfill gas asset in Dallas, Texas), and with this acquisition we have significant sales, manufacturing and service operations worldwide," Littlefair added.
"IMW is engaged in a major global growth program as we seek to capture a significant share of the NGV vehicle fueling expansion," said IMW President Brad Miller. "Clean Energy is a solid partner that will help us achieve our goals."
Clean Energy has deployed IMW compressors and related equipment for several years in many of its 200 stations across the United States.