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Clean Energy Merges Compressor Business with Landi Renzo

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Clean Energy Fuels Corp.CLNE recently announced that the merger of its compressor manufacturing subsidiary with that of Italian component manufacturer, Landi Renzo. The move will create a separate entity, which will supply gas compressors and related products globally.

Details of the Merger

The deal is expected to be completed by the end of 2017. Per the agreement, Clean Energy will hold 49% in the merged entity while Landi Renzo will be the operator with 51% stakes.

The standalone company will be headquartered in San Giovanni Persiceto, Italy. It will avail the manufacturing operation of Clean Energy located in Chilliwack, British Columbia of Canada. Clean Energy's president and CEO, Andrew J. Littlefair will be the chairman of the combined company's board, while Cristiano Musi, the CEO of Landi Renzo, will become the CEO of the combined company.

Per Reuters, the newly-formed company is expected to have a turnover of around €58 million by the end of 2018. The figure will increase to €107 million by the end of 2022.

Transaction Synergy

With the world moving toward cleaner energy, demand for natural gas and related products are expected to increase. Alternative sources of energy are appropriate to ward off climate changes. The new compressor company, with its various natural gas products offering, is expected to benefit from the shift toward alternative fuel.

Moreover, Clean Energy's well-established presence in the North and South America markets along with Landi Renzo's hold in the European and Asian markets will help the combined entity to perform favorably and earn improved margins.

About Clean Energy

Clean Energy is headquartered in Seal Beach, CA. It is one of the leading providers of natural gas for transportation in North America. It has a broad customer base in the refuse, transit, ports, shuttle, taxi, intrastate and interstate trucking, airport and municipal fleet markets, across the United States and Canada.

Clean Energy has lost 25.9% of its value year to date versus the 7.8% rally of the industry .

Zacks Rank & Stocks to Consider

Clean Energy currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the gas distribution utility space include Chesapeake Utilities Corp. CPK , Spire Inc. SR and ONE Gas, Inc. OGS . All the stocks sport a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Chesapeake Utilities, based in Dover, DE, is a diversified energy company. The company's sales for 2017 are expected to increase 17.3% year over year. The company delivered a positive earnings surprise of 20% in the third quarter of 2017.

Spire, based in St. Louis, MO, is a natural gas company. The company's sales for the fourth quarter of 2017 are expected to increase 7.8% year over year. The company delivered an average positive earnings surprise of 7.2% in the last four quarters.

ONE Gas, based in Tulsa, OK, is a natural gas distribution utility company. The company's sales for 2017 are expected to increase 5.9% year over year. The company delivered an average positive earnings surprise of 7.5% in the last four quarters.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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