Pier Antonio Costamagna, a co-founder of Fuel Systems Solutions, Inc.
(“FSS”) (NASDAQ:FSYS) today commented on his continued significant
concerns regarding the clear lack of value in a combination of FSS and
Westport Innovations, Inc. (“Westport”) (TSX:WPT / NASDAQ:WPRT). Mr.
Costamagna has sole voting power over 1,576,043 shares of FSS common
stock, representing approximately 8.7% of outstanding shares and he
intends to vote AGAINST the merger at the FSS stockholder meeting
scheduled for Tuesday, May 31, 2016. He noted a summary of critical
points informing his decision.
NO PREMIUM, UNCERTAIN FUTURE WITH WPRT, HIGH RISK OF INSOLVENCY |
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- No merger-related premium – the offer represents a 21%
discount to FSS’ unaffected share price. WPRT’s share price has
declined 39% since merger announcement
- WPRT has significant debt load maturing and recently raised
funds from Cartesian at an effective interest rate of 23%
- Cartesian will have significant influence and control over
combined company
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WPRT subject to ongoing revenue decline and questionable outlook
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FSS receiving inadequate stake for its revenue and EBITDA
contribution to the combined company
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Combined company expected to generate negative adjusted EBITDA
in FY16 and FY17 and require $150mm of additional financing
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Real risk of insolvency for the combined company. CEO did not
vote for the merger and one director resigned in protest
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LIMITED DOWNSIDE TO REJECTION |
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- Standalone value substantially higher than current implied
offer price
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Mean average Discounted Cash Flow (DCF) - $14.85
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Mean average equity research Estimates - $8
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Almost no debt and $49.5 million in cash and short term
investments as of March 31, 2016
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DCF analysis shows a mean average discount of 65% based on the
current offer
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Expected to generate positive adjusted EBITDA in both FY16 and
FY17
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Third Party’s offer of $4.5 per share in cash, provides
effective floor to the share price if the merger is rejected
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Proxy reflects pressure applied to directors to approve amended
merger agreement
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View source version on businesswire.com: http://www.businesswire.com/news/home/20160527005332/en/
Contacts:
Abernathy MacGregor
Pat Tucker, 212-371-5999
pct@abmac.com
or
Cia
Williams, 212-371-5999
cew@abmac.com