Power Solutions International Inc., a leader in the design, engineering and manufacture of emissions-certified alternative-fuel and conventional power systems, has announced it agreed to purchase Powertrain Integration LLC of Madison Heights, MI, the on-highway power system manufacturer.
The definitive agreement provides for the purchase of the assets of Powertrain Integration and the assumption of certain liabilities. The purchase price consists of $21.6 million in cash and targeted contingent consideration of $8 million in cash. The purchase is expected to close in about 30 days.
For over 10 years, Powertrain Integration (PI) has provided General Motors (GM) on-highway powertrain solutions, including systems, components and services, for niche on-highway OEMs and fleets. The company specializes in alternative-fuel and gasoline systems and offers design, engineering, testing and engine calibration to deliver one-stop on-highway vehicle integration.
Through its multi-year agreement with Freightliner Custom Chassis Corp., PI equips several prominent customers, including UPS and vehicle manufacturer Morgan Olson. In November 2014, PI announced the delivery of 1,000 GM 6.0-liter propane engine packages to Freightliner for UPS vehicles. PI's 2014 sales for GM 6.0-liter systems exceeded 6,000 units. Recently, the company received a similar order from Freightliner for 600 additional natural gas and propane engines, also for UPS.
With the purchase of Powertrain Integration, PSI solidifies its on-highway market position, knowledge and experience significantly.
"This acquisition fits perfectly into our on-highway strategy," says Gary Winemaster, PSI's Chairman and Chief Executive Officer. "We're not only expanding our product portfolio to give customers more options—we're also adding PI's years of on-highway experience, its technical expertise and its strong customer relationships to our own capabilities."
Both companies share a long history and strong relationship with GM, which will be simplified by the agreement. PSI is now positioned as the only on-highway OEM integrator for GM powertrains, utilizing the GM 8.0-liter, 6.0-liter and 4.8-liter engine blocks, along with other new options as they become available.
Robert Pachla, Powertrain Integration's President, adds, "This agreement will strengthen and expand the on-highway business model we created 10 years ago at PI. We began as an engineering company and will build off of that expertise with PSI. Together, we offer capabilities that are second to none in the global on-highway market."
Winemaster says that customers should expect "business as usual" in terms of supporting PI's current GM engine programs as well as its 8.0-liter V8 powertrain. The 8.0-liter engine powers Freightliner's S2G medium-duty truck and recently announced box truck platforms.
Winemaster adds that with PSI's financial and executional support, there is a great opportunity to expand those programs into new markets and end-use applications. These applications include the projected $250 million non-diesel RV market and an expanding propane school bus market. He says PSI hopes to build on the solid partnership that PI has developed with Freightliner, as well as further PI's strong relationships with on-highway OEMs in China and other markets.