WPRT Acquires OMVL, Consolidates Juniper

Analysts at Jefferies & Co reiterate their "hold" rating on Westport Innovations

, while reducing their estimates for the company. The target price for WPRT is set to $17. According to Jefferies & Co, “Westport is acquiring 100% of the outstanding shares of OMVL SpA and OMVL's 51% share of the Juniper Engines JV from SIT Group of Italy for roughly $23.4m, subject to adjustment based on consolidated net cash position at the closing date. The transaction will be completed in two stages, with the first $14m (Euro 11.4m) paid at closing and the remaining $9.4m (Euro 7.6m) paid on the third anniversary of the closing date (with no contingencies). Following the deal, Juniper and OMVL will be combined into a wholly owned consolidated Westport business unit. The acquisition is subject to closing conditions.” “With OMVL's high-volume manufacturing capabilities and Westport's engine calibration and testing capabilities, the combined company should be better-equipped to address the global light-weight alternative vehicle market,” the analysts mention. Jefferies & Co have lowered its EPS estimates for FY11 from -$0.66 to -$0.70 to “reflect $25m in acquired sales in 2Q11-4Q11, more than offset by near-term gross margin pressure (due to purchase mark-up on OMVL's existing inventory) and integration costs.”