Clean Energy Fuels, the natural-gas vehicle distribution company of which former oil barron T. Boone Pickens is a director and largest shareholder, said last month it planned to buy FuelMaker from Honda and the FuelMaker Trust for $17 million. Well, late yesterday the companies announced that they have agreed to terminate the deal.
There were few details given in the announcement as to why Honda and Clean Energy Fuels changed their minds, and we’re still waiting to hear back from the companies. But in the regulatory filing it sounds like Honda was actually the initiator of ending the agreement. In the filing Clean Energy Fuels says both companies had the right to terminate the purchase agreement if it did not close on or before Oct. 3, and this didn’t happen due to the fact that the sellers (Honda and Fuelmaker) were unable to deliver audited financial statements for FuelMaker’s parent company, a subsidiary of Honda, by that date. Clean Energy Fuels says it continued to negotiate but that on Oct. 13, 2008:
Honda delivered to us a notice that it intended to terminate the purchase agreement; and, after subsequent discussions, on October 15, 2008, we and Honda mutually agreed to terminate the purchase agreement in accordance with its terms.
That’s all we know, but the auto industry definitely has been having a hard time as of late. We talked briefly with FuelMaker President John Lyon and he referred us to Honda and Clean Energy Fuels for why the deal fell through.
Founded in 1989 and based in Toronto, FuelMaker manufactures natural-gas refueling appliances for industrial fleets, as well as a home consumer product called the Phill. Announced six years ago, the Phill compresses natural gas from home gas lines for vehicle fueling; it takes about four hours to fill an empty tank after a 50-mile drive. While it costs between $5,500 and $6,000 (there’s a possible tax rebate of $1,000 or so), Picken’s plan to power U.S. vehicles with natural gas could have used the Phill to help break the home distribution bottleneck.
But it looks like Clean Energy Fuel’s role in spearheading natural gas vehicle stations in our homes will just have to wait. FuelMaker was just one of Clean Energy Fuel’s planned acquisitions and investments. Earlier this year Clean Energy Fuels said it would purchase Dallas Clean Energy (DCE), owner of the McCommas Bluff landfill gas processing plant, for $19.1 million, and also agreed to co-invest $10 million (and another $10 million from Pickens) in the creation of a natural gas vehicle. The company’s stock (CLNE) was trading at $9.44 as of this writing, down from nearly $20 in early September.