Finning to acquire portion of Bucyrus distribution business
Acquisition positions Finning to provide broad and unmatched support to mining customers
VANCOUVER-based Finning International Inc. (represented in the UK by Finning UK and Ireland) and Caterpillar Inc. have reached an agreement for Finning to acquire from Caterpillar the distribution and support business formerly operated by Bucyrus in portions of South America and western Canada and in the UK.
The deal represents part of Caterpillar’s plan to transition all of the Bucyrus distribution business to relevant Cat dealers around the world.
After closing, Finning International will begin providing sales, service and support for former Bucyrus mining products in all Finning dealership territories. The company says it expects to fund the transaction, which is valued at approximately US$465 million, primarily through the issuance of US 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,’ said Mike Waites, president and CEO of Finning International.
‘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.
‘This acquisition provides an industry-leading product platform and sizeable Bucyrus machine population in our resource-rich mining territories in South America and Canada, adding new revenue opportunities and robust, long-term growth potential for our company and employees.’
Steve Wunning, Caterpillar group president with responsibility for Resource Industries, said:
‘We’re making good progress as we transition the product distribution and support of former Bucyrus machinery to Cat dealers around the world. Finning and Caterpillar have shared a long-standing 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 US$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.
Subject to customary closing conditions, it is anticipated that the transaction will close in two phases: in Finning South America and Finning UK and Ireland late in the first quarter of 2012, followed by Canada in the second quarter.
