Meritor Inc. (NYSE: MTOR) is buying the rest of electric systems supplier Transportation Power Inc. that it did not already own, planning to offer integrated electric powertrains for medium- and heavy-duty trucks.
The move was surprising only for its timing. Meritor executives hinted in 2019 that a full acquisition of the Escondido, California-based company was only a matter of time. Meritor had invested $12 million in four transactions in TransPower as the companies collaborated on numerous electrification projects.
The TransPower name has been around since its founding in 2010. It probably will disappear over time as the company is integrated into Meritor, which acquired TransPower on Jan. 16, 2020. (Photo: TransPower)
“As we get more involved from a product development standpoint, we’ll be giving a lot of thought to the go-to-market strategy,” Meritor spokeswoman Krista Sohm told FreightWaves,
Meritor, a 110-year-old maker of driveline equipment for commercial truck, trailer, off-highway, defense, specialty and the aftermarket integrated AxleTech, a May 2019 acquisition, into its Blue Horizon brand. That is Meritor’s platform of advanced technologies centered on electrification.
“As we go to big industry shows, the AxleTech products are being shown under the Meritor name,” Sohm said.
When that will happen with TransPower is unclear, she said.
A lack of integration may have contributed to Meritor and TransPower being replaced by Dana Inc. (NYSE: DAN) on a program to upfit Paccar Inc. (NASDAQ: PCAR) trucks for its Kenworth Truck Co. and Peterbilt Motors brands.
A Meritor and TransPower system introduced on the Peterbilt 220EV in 2019 is being replaced by a fully integrated Dana system introduced at CES 2020 for the Kenworth K270E.
“If they can consolidate operations and provide a more complete solution, coming from one source is preferable,” said Sam Abuelsamid, an analyst with Navigant Research. “Given the substantially smaller volumes in the heavy-duty market, more consolidation is likely to drive the cost down.”
Meritor did not disclose its stake in TransPower before Thursday’s announcement.
Almost 100 vehicles with electrification systems from Meritor and TransPower will be completed between 2019 and this year. Peterbilt will receive 36 of those by the end of the first quarter for testing with customers like Werner Enterprises (NASDAQ: WERN). Another 38 will be part of a $50 million project to make electric yard tractors for the ports of Long Beach and Oakland, California.
“This acquisition enables us to further position the company as a premier supplier of electrification technologies for commercial vehicles,” Meritor CEO Jay Craig said in a statement.
TransPower founder and CEO Michael Simon told FreightWaves he will remain as an independent consultant for a period of time. Meritor Vice President T.J. Reed will lead the integration of TransPower into Meritor.
Image Sourced from Pixabay