Caterpillar to sell Bucyrus distribution business

Caterpillar Inc. announced it is selling the distribution and support business formerly operated by Bucyrus International Inc. to Finning International Inc.
Finning will acquire from Caterpillar the distribution and support business formerly operated by Bucyrus in portions of South America, western Canada and in the United Kingdom.
After closing, Vancouver-based Finning expects to begin providing sales, service and support for former Bucyrus mining products in all of Finning’s dealership territories.
The transaction is valued at approximately $465 million. Finning expects to fund the transaction primarily through the issuance of U.S. and Canadian dollar denominated term debt.
"The acquisition of the Bucyrus distribution business is a major strategic milestone for Finning that will expand our leadership position in the growing mining sector and deliver greater value for our customers and shareholders. Upon the close of this acquisition, Finning will be able to sell and support a comprehensive product line that meets our customers’ surface and underground mining equipment needs," said Mike Waites, president and CEO of Finning International. "This acquisition provides an industry-leading product platform and sizeable Bucyrus machine population in our resource rich mining territories in South America and Canada. This acquisition adds new revenue opportunities and robust, long-term growth potential for our company and employees."
"We’re making good progress as we transition the product distribution and support of former Bucyrus machinery to Cat dealers around the world," said Steve Wunning, Caterpillar group president with responsibility for Resource Industries. "Cat dealers have a proven track record helping customers realize the highest productivity and lowest owning and operating costs, and many mining customers have told us how important the dealers are to their success. Finning and Caterpillar have shared a longstanding relationship for close to 80 years, and we look forward to realizing the growth opportunities created by this agreement."
The acquired distribution and support business, which has current annual revenues of about $600 million, includes facilities and inventory primarily in South America and Canada, as well as approximately 900 former Bucyrus employees who are expected to transition to Finning upon closing of the acquisition.
In December, Caterpillar announced Sime Darby Industrial had acquired a portion of the former Bucyrus distribution business encompassing the Cat dealerships operated by Hastings Deering. Caterpillar continues to hold discussions with other Cat dealers that have mining activity in their territories and will continue to operate the former Bucyrus distribution business until the transitions have occurred in a given territory.
Caterpillar spokeswoman Bridget Young said the sale will not have any impact on the company’s operations in Oak Creek and South Milwaukee.