VANCOUVER — The world of trucks fuelled by natural gas has changed significantly with the announcement that Westport Innovations has acquired BAF Technologies (BAF) and its subsidiary, ServoTech Engineering (ServoTech), both of them in turn subsidiaries of Clean Energy Fuels. The price tag was $25 million in Westport stock. Westport and Clean Energy also announced a $5-million joint marketing and sales program.
Already dominant as a manufacturer and supplier of engines and related natural gas componentry, Westport now has greater muscle on both the product-development and marketing sides of its enterprise. One ultimate result of the link with Clean Energy may be quicker penetration of natural gas trucks into heavy-duty over-the-road markets and thus the hastening of more accessible vehicle prices. But in direct terms this deal covers only the light- and medium-duty end of things.
Westport says the “…amalgamation will create the largest product portfolio and largest market presence in the North American light-duty natural gas vehicle (NGV) space.” Specifically, Westport secures its position as Ford’s largest partner under the Qualified Vehicle Modifier (QVM) program with 10-plus products and some 150 Ford authorized dealerships.
“We welcome the BAF and ServoTech teams to Westport,” said Ian Scott, executive vice president of Westport. “BAF has established a strong portfolio of natural gas vehicle products and customers over the past decade. With natural gas increasingly seen as a major transportation fuel around the world, we believe the combination of this new team’s market experience and Westport’s technologies, scalable manufacturing processes, and quality control systems will help create the type of products needed to deliver an OEM-quality vehicle experience to our customers.”
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 a total engineering solution from initial concept phase to prototype hardware and final prove-out, including design and development of electronic products, software development, automotive exhaust simulation and testing, spark-ignition gasoline and diesel emissions technology. It also offers technical training and education.
Currently, Westport exclusively installs the natural gas Westport WiNG Power System on the Ford F-250 through F-550 series at its assembly center in Louisville, KY. This acquisition increases Westport’s product range with the Ford line to include transit, cargo shuttle, and taxi vehicles and dedicated natural gas vehicles for markets such as California. BAF has been producing a broad list of natural gas vehicle conversions for more than a decade and recently produced its 20,000th compressed natural gas (CNG) vehicle conversion. Westport will continue to install the Westport 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 speciality configurations.
Ford QVM products, all EPA- and CARB-approved, include Ford Transit Connect (CARB pending); Ford E-250/350 and E-450/550; Ford F-250/350 and F-450/550/650; and Ford F-59.
“We are extremely pleased with our original investment in BAF and the growth it has achieved over the last five years,” “This is a great opportunity for Clean Energy to sharpen our focus on fuel solutions as the market for NGV’s quickly builds momentum,” said Andrew J. Littlefair, president and CEO, Clean Energy. “Westport will deliver great products, and we at Clean Energy will build the fuel infrastructure to fuel the vehicles. Our new marketing partnership expands our long-standing relationship and alliance as we worked together over the past decade.”
Westport has committed $5 million to a new co-marketing program aimed at expanding the NGV market. It will allow Westport to provide purchase incentives for fleets, including fuel credits, and includes a commitment from Clean Energy to purchase Westport products.
Clean Energy will provide 750,000 GGEs (gasoline gallons equivalents) of CNG, to be used by Westport as marketing and “bundling” incentives. Fuel is useable anywhere in the Clean Energy network of CNG fueling stations until December 2015.
Clean Energy will provide support for Westport product sales and marketing. The companies will collaborate on specific customer situations, industry activities, and joint policy positions. Clean Energy will commit to fulfill at least 50% of its light- and medium-duty natural gas commercial vehicle needs from Westport and BAF during the term of the marketing agreement