Mr. Dan Sceli reports

WESTPORT ANNOUNCES AGREEMENT TO DIVEST THE LIGHT-DUTY SEGMENT FOR $73.1 MILLION

Westport Fuel Systems Inc. has entered into a binding agreement to sell its interest in Westport Fuel Systems Italia SRL, which includes the light-duty segment, including the light-duty OEM (original equipment manufacturer), delayed OEM and independent aftermarket businesses, to a wholly owned investment vehicle of Heliaca Investments Cooperatief UA, a Netherlands-based investment firm supported by Ramphastos Investments Management BV, a prominent Dutch venture capital and private equity firm. The transaction provides for a base purchase price of $73.1-million (67.7 million euros), subject to certain adjustments, and potential earnouts of up to an estimated $6.5-million (six million euros) if certain conditions are achieved, in accordance with the terms of the agreement.

Moving forward, Westport intends to concentrate fully on providing affordable solutions for hard-to-decarbonize mobility and industrial applications, centred around the unique opportunities created by the HPDI (high-pressure direct injection) technology and its Cespira joint venture. The transaction also strengthens Westport's balance sheet and enables Westport to consider strategic acquisition opportunities consistent with the above strategic focus and extend its runway to finance near-term growth.

"This transaction marks a significant milestone in our evolution as an alternative fuel systems enterprise. By returning to our roots and focusing on our core strengths, providing solutions in hard-to-decarbonize mobility and industrial applications, we are positioning Westport for sustainable growth and enhanced operational efficiency. The light-duty segment has been an important part of our history, and we are confident that Heliaca Investments is the right partner to continue its development. This transaction allows us to streamline our operations, sharpen our focus on innovation and create long-term value for our stakeholders. We are excited about the opportunities ahead and look forward to building on our momentum," said Dan Sceli, chief executive officer of Westport Fuel Systems.

Under the terms of the agreement, Heliaca Investments, through its subsidiary, will acquire Westport's light-duty segment, including its related assets and customer contracts. The transaction is subject to shareholder approval and other customary closing conditions and is expected to close in late Q2 2025.

The proceeds from the proposed transaction are expected to enable Westport to significantly improve its financial stability while also supporting key growth initiatives focused on providing solutions for hard-to-decarbonize mobility and industrial applications. Following closing, Westport intends to align its cost structure to be more reflective of a smaller, more efficient organization while also seeking further opportunities for efficiency gains.

Strategic transformation

The proposed divestiture is a pivotal step in refocusing Westport on its competitive strengths. Westport remains committed to providing affordable, alternative fuel solutions for the heavy-duty truck, off-road and industrial markets. Westport believes that hydrogen will play a role in decarbonizing mobility applications in the long term. However, Westport's products are timeline agnostic, allowing the company to leverage its high-pressure controls and systems segment and its stake in Cespira, which both have solutions available now, to address decarbonization with net-zero and low-carbon fuels while also providing affordable solutions utilizing zero-carbon hydrogen in the future. Westport's remaining assets, when combined, create the potential for fuel-agnostic high-pressure storage solutions, complementing HPDI and Cespira's growth aspirations.

As the hydrogen ecosystem evolves, Westport views the natural gas market, including LNG (liquefied natural gas), CNG (compressed natural gas) and RNG (renewable natural gas), as the company's foundation, with strong economics in many geographies and diverse growth opportunities. The company's GFI products are already industry leading on a global scale and backed by intellectual property rights that are expected to strengthen Westport's already-significant competitive advantage in high-pressure fuel solutions.

Moreover, the company will consider strategic merger and acquisition opportunities that align with the reimagined strategic focus.

Creating focus

The resurgence of natural gas and renewable natural gas globally provides a market opportunity for Westport. In particular, while HPDI technology is well positioned and established in Europe, the North American market presents many growth opportunities. North America is again embracing natural gas and renewable natural gas as an important part of the solution to reduce the cost and the carbon footprint of heavy-duty long-haul trucking. Natural gas infrastructure is abundant and RNG production is growing.

As the company waits for hydrogen adoption, both Cespira and Westport's high-pressure controls and systems segment have products and technologies enabling the use of lower-carbon fuels today. These same products are equally viable in the future as hydrogen adoption ramps up. In the near-term, Westport's high-pressure controls and systems business has expertise in high-pressure components, providing the capability to rapidly develop CNG high-pressure solutions for heavy-duty, off-road and industrial applications, providing effective solutions for decarbonization by utilizing alternative fuels today while advancing zero-emission hydrogen solutions for the future. Additionally, the company holds extensive intellectual property assets related to high-pressure fuels for HPDI engines. These initiatives are being designed to strengthen Westport's competitive position and reinforce its role in advancing low-carbon fuel solutions for hard-to-decarbonize mobility applications.

Advisers

J.P. Morgan is acting as financial adviser to Westport and is providing a fairness opinion to the board of directors in connection with the transaction. Bennett Jones LLP and Delfino Willkie are acting as legal advisers to Westport, and E&Y is acting as tax adviser to the company.

Gianni & Origoni, NautaDutilh, Wardynski & Partners, and PwC are advising Heliaca Investments in connection with the transaction.

About Westport Fuel Systems Inc.

At Westport Fuel Systems, the company is driving innovation to power a cleaner tomorrow. Westport is a leading supplier of advanced fuel delivery components and systems for clean, low-carbon fuels such as natural gas, renewable natural gas, propane and hydrogen to the global transportation industry. Westport's technology delivers the performance and fuel efficiency required by transportation applications and the environmental benefits that address climate change and urban air quality challenges. Headquartered in Vancouver, Canada, with operations in Europe, Asia, North America and South America, Westport serves its customers in approximately 70 countries with leading global transportation brands. At Westport Fuel Systems, the company thinks ahead.

We seek Safe Harbor.