Caterpillar to Sell Part of Bucyrus Distribution Business to Cat Dealer Barloworld
PEORIA, Ill., May 30, 2012 /PRNewswire/ — Caterpillar Inc. (NYSE: CAT) and Barloworld Limited today announced that Caterpillar Global Mining LLC and Barloworld have signed an agreement for Barloworld to acquire the Bucyrus equipment distribution and support business in South Africa and Botswana. The transaction between Caterpillar and Barloworld is valued at approximately USD $115 million. In addition, Caterpillar Global Mining has assigned to Barloworld its agreements with Eqstra NH Equipment (Pty) Limited and Eqstra Botswana (Pty) Limited (together referred to as ‘Eqstra’) for the purchase of Eqstra’s South Africa and Botswana Bucyrus distributorship and mining services businesses. For Barloworld, the total transaction, including the former Eqstra mining services businesses, is valued at approximately USD $175 million.
“We’re pleased to announce this agreement today as we continue to make good progress on our transition of 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. “Barloworld and Caterpillar have a longstanding relationship, and we look forward to realizing the growth opportunities created by this agreement.”
Subject to customary closing conditions and required regulatory approvals, it is anticipated that the transaction will close in the third quarter of 2012.
Upon completion of these transactions, Barloworld expects to begin providing sales, service and support for all of the former Bucyrus mining products in all its dealership territories in southern Africa.
Clive Thomson, CEO of Barloworld said, “This acquisition is perfectly aligned with the group’s growth strategy. It builds on our existing strengths and will enhance our leading position in the mining industry by significantly expanding the range of equipment solutions we are able to provide to customers operating across southern Africa.”
Following completion of the acquisition, approximately 470 former Bucyrus and Eqstra employees and contract workers are expected to transition to Barloworld.
Discussions are continuing between the companies in relation to the former Bucyrus distribution and support businesses in the Barloworld dealership territories in Russia and Iberia.
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. To date, Caterpillar has closed similar transactions with Sime Darby Industrial and Finning International Inc. (for portions of the Bucyrus distribution and support business in South America and the U.K.). The company has also announced deals with three other dealers including Finning International Inc. (for portions of the Bucyrus distribution and support business in Canada), WesTrac Pty Limited and Ferreyros S.A.A.
For more than 85 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. With 2011 sales and revenues of $60.138 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services. More information is available at: http://www.caterpillar.com.
Barloworld is a distributor of leading international brands providing integrated rental, fleet management, product support and logistics solutions. The core divisions of the group comprise Equipment (earthmoving and power systems), Automotive and Logistics (car rental, motor retail, fleet services, used vehicles and disposal solutions, logistics management and supply chain optimisation) and Handling (materials handling and agriculture). We offer flexible, value adding, integrated business solutions to our customers backed by leading global brands. The brands we represent on behalf of our principals include Caterpillar, Hyster, Massey Ferguson, Avis, Audi, BMW, Ford, General Motors,Mercedes-Benz, Toyota, Volkswagen and others.
Barloworld has a proven track record of long-term relationships with global principals and customers. We have an ability to develop and grow businesses in multiple geographies including challenging territories with high growth prospects. One of our core competencies is an ability to leverage systems and best practices across our chosen business segments. As an organisation we are committed to sustainable development and playing a leading role in empowerment and transformation. The company was founded in 1902 and currently has operations in 26 countries around the world with approximately 60% of our eighteen thousand employees in South Africa. www.barloworld.com
Certain statements in this press release relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,” “could,” “should” or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance, and we do not undertake to update our forward-looking statements.
Caterpillar’s actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global economic conditions and economic conditions in the industries and markets we serve; (ii) government monetary or fiscal policies and infrastructure spending ; (iii) commodity or component price increases and/or limited availability of raw materials and component products, including steel; (iv) our and our customers’, dealers’ and suppliers’ ability to access and manage liquidity; (v) political and economic risks and instability, including national or international conflicts and civil unrest; (vi) our and Cat Financial’s ability to: maintain credit ratings, avoid material increases in borrowing costs, and access capital markets; (vii) the financial condition and credit worthiness of Cat Financial’s customers; (viii) inability to realize expected benefits from acquisitions and divestitures, including the acquisition of Bucyrus International, Inc.; (ix) international trade and investment policies; (x) challenges related to Tier 4 emissions compliance; (xi) market acceptance of our products and services; (xii) changes in the competitive environment, including market share, pricing and geographic and product mix of sales; (xiii) successful implementation of capacity expansion projects, cost reduction initiatives and efficiency or productivity initiatives, including the Caterpillar Production System; (xiv) sourcing practices of our dealers or original equipment manufacturers; (xv) compliance with environmental laws and regulations; (xvi) alleged or actual violations of trade or anti-corruption laws and regulations; (xvii) additional tax expense or exposure; (xviii) currency fluctuations; (xix) our or Cat Financial’s compliance with financial covenants; (xx) increased pension plan funding obligations; (xxi) union disputes or other employee relations issues; (xxii) significant legal proceedings, claims, lawsuits or investigations; (xxiii) compliance requirements imposed if carbon emissions legislation and/or regulations are adopted; (xxiv) changes in accounting standards; (xxv) failure or breach of IT security; (xxvi) adverse effects of natural disasters; and (xxvii) other factors described in more detail under “Item 1A. Risk Factors” in our Form 10-K filed with the SEC on February 21, 2012 for the year ended December 31, 2011. This filing is available on our website at www.caterpillar.com/secfilings.
SOURCE Caterpillar Inc.