Mergers & Acquisitions

Mergers & Acquisitions

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.

Milwaukee private equity firm acquires Minnesota company
Generation Growth Capital Inc., a Milwaukee-based private equity firm focusing on investments in lower middle market businesses to support growth opportunities has acquired Midway Industrial Supply Co. Inc. of St. Paul, Minn.
The acquisition was made with with senior debt financing from Minnesota Bank & Trust and mezzanine financing from ExMarq Capital Partners. Financial terms of the transaction were not disclosed.
For more than 60 years, Midway has been a leading distributor and systems integrator of fluid handling and spray finishing equipment and supplies, selling products from Graco, ITW Binks/DeVilbiss/Ransburg, Nordson, Global Finishing Solutions and many other key vendor partners.
Midway Industrial Supply sells to a variety of manufacturers in the Upper Midwest, with a presence in Minnesota, Wisconsin, Illinois, Iowa, Nebraska and the Dakotas. The existing management team, including CEO Gregg Lien, will continue operating the business following the transaction.
Lien remarked, "Midway Industrial Supply is thrilled to partner with Generation Growth Capital to further fuel the success and growth of our business. With Generation’s help, we look forward to expanding our markets while continuing to deliver the same great products and service our customers have come to depend on for decades."
Generation Growth Capital is investing out of its second fund and currently has investments in six other portfolio companies across a variety of industries.
John Reinke, a managing director of Generation Growth, said, "Midway Industrial Supply represents a model investment for GGC. Gregg Lien has developed a very strong operating model that can be used as a growth platform for future acquisitions. We very much look forward to working with Gregg and helping to drive the growth strategy of Midway."

Charter Automotive acquires new plant in England
Charter Automotive, a division of Mequon-based Charter Manufacturing Company, announced a major expansion of the company’s European operations with the purchase of a 57,000 square-foot manufacturing facility in Burntwood, England.
Charter Automotive is a global market leader and a Tier 1 supplier of engineered components for the automotive industry.
John Mellowes, chairman and chief executive officer of Charter Manufacturing, said that the expansion of Charter Automotive allows the company to strengthen its position as a leading global supplier of valve spring retainers, valve keys and other components.
"The expansion of our manufacturing capabilities in England will strengthen our position as a global supplier to OEM automotive and powertrain industries and will allow us to better meet the growing needs of Charter Automotive’s rapidly expanding European and worldwide customer base," Mellowes said.
Mellowes added that the expansion also brings job growth opportunities in England for workers with experience and skills in the manufacturing of cold-headed parts and will require the company to make major capital investments in new technology and equipment.
Charter Automotive’s new facility will be located about 16 kilometers from its current Lichfield, England, plant, which was acquired in 2007 with the purchase of Valve Train Components, Ltd. – a European supplier of powertrain components.
Pete Murray, vice president and general manager of Charter Automotive, said that the company expects to begin manufacturing at the new plant later this year and will ultimately consolidate all of its European operations into the new facility.
"Our expansion into a new and larger plant in England is a major step in our global manufacturing strategy to support customers throughout the world with a balanced operating footprint in the United States, Europe and China," Murray said.
Mellowes noted that the company’s expansion in England comes on the heels of new investments in Charter Automotive in Milwaukee, including an increase in the number of manufacturing shifts from three to four, the addition of more manufacturing capacity and the creation of additional family-supporting jobs in the community.
The company also operates a warehouse operation in Wuhu, China, about 400 kilometers northwest of Shanghai, China, giving Charter Automotive deep capabilities to meet the demands of the company’s international customer base.
"With our major expansion in England, the additional capital investments and job growth in Milwaukee and our strong presence in China, Charter Automotive has increased its worldwide footprint and is in a strong position for continued growth in North America, Europe, Asia and around the globe," Mellowes said.

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