VANCOUVER, B.C. — Finning International, the world’s largest Caterpillar dealer based in Vancouver, B.C., Canada, has reached an agreement with Caterpillar for Finning to acquire the distribution and support business formerly operated by Bucyrus in portions of South America, western Canada and the U.K. After closing, Finning expects to begin providing sales, service and support for former Bucyrus mining products in all of Finning’s dealership territories.
Finning is paying U.S. $465 million in the deal, and expects to fund the transaction primarily through the issuance of U.S. and Canadian dollar denominated term debt. Finning said the transaction will be accretive to its 2012 earnings.
“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. This acquisition adds new revenue opportunities and robust, long-term growth potential for our company and employees.”
Caterpillar group president with responsibility for resource industries Steve Wunning said Caterpillar is making good progress transitioning the product distribution and support of former Bucyrus machinery to Cat dealers around the world.
The acquired distribution and support business has current annual revenues of about U.S. $600 million. The business includes facilities and inventory in South America and Canada and about 900 former Bucyrus employees who will transition to Finning upon closing. The transaction is likely to close in two phases, beginning in South America and the U.K. and Ireland in the first quarter, followed by Canada in the second quarter.
Finning operates in western Canada, Chile, Argentina, Bolivia, Uruguay, Ireland and the U.K. A major rental company, Finning is No. 9 on the RER 100.
