UPDATE: Caterpillar To Sell Some Bucyrus Operations To WesTrac For $400 Million
April 12 2012 - 2:03AM
Dow Jones News
MELBOURNE (Dow Jones)--Caterpillar Inc. (CAT) said Thursday it
has struck a deal to sell the distribution business for its Bucyrus
mining equipment in parts of Australia to Cat dealer WesTrac Pty.
Ltd. for roughly US$400 million.
The agreement is expected to close by the end of June and will
see some 430 employees and contractors transfer to WesTrac, the
heavy equipment division of conglomerate Seven Group Holdings Ltd.
(SVW.AU), Caterpillar said.
WesTrac separately estimated the sales and support businesses in
Western Australia, Australian Capital Territory and New South Wales
regions generate annual revenue of 600 million-650 million
Australian dollars (US$622.5 million-US$674.4 million). It expects
the acquisition to be neutral for earnings per share this financial
year, but accretive thereafter, excluding the transaction
costs.
Caterpillar finalized the US$7.6 billion purchase of Bucyrus
International Inc. last year, and in January agreed to sell the
distribution business for Bucyrus in South America, western Canada
and the U.K. to Finning International Inc. (FTT.T) for US$465
million. A month earlier it had agreed to sell the distribution
business in Australia's Queensland and Northern Territory, Papua
New Guinea and New Caledonia to Sime Darby Bhd (4197.KU) for US$360
million.
WesTrac said it continues to discuss with Caterpillar the
possible acquisition of Bucyrus distribution businesses in north
eastern China, while the Illinois-based company said discussions
also continue with other Cat dealers that have mining activity in
their territories.
WesTrac is one of Caterpillar's top five dealers globally by
sales value, and the sole authorized Cat dealer in three Australian
territories and parts of China. It said the purchase of the Bucyrus
businesses will be funded by a new five-year term loan.
"The Bucyrus product line and large installed base are a logical
addition to our current range of Cat product, and will provide us
with significant opportunities for future growth with our mining
customers," said Jim Walker, chief executive of WesTrac.
Bucyrus produces a range of heavy mining equipment, including
electric rope shovels, draglines, drills and trucks.
-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094;
robb.stewart@dowjones.com
--Ross Kelly in Sydney contributed to this article.