North / South America
Caterpillar sheds another Bucyrus business
May, 31 2012
(Illinois) -- Caterpillar Inc. announced Wednesday, May 30, that it will sell its Bucyrus equipment distribution and support business in South Africa and Botswana to Sandton, South Africa, mining equipment and logistics service business Barloworld Ltd. for $115 million.
Peoria, based Caterpillar has been steadily shedding assets since its $8.6 billion acquisition of mining-gear maker Bucyrus International Inc. in November. It is unloading distribution assets gained from Bucyrus to eliminate redundancies from Caterpillar's own extensive network.
"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," Caterpillar group president Steve Wunning said in a statement. "Barloworld and Caterpillar have a long-standing relationship, and we look forward to realizing the growth opportunities created by this agreement."
Barloworld CEO Clive Thomson added the deal will expand the range of equipment solutions the buyer can provide to customers operating across southern Africa.
A prior agreement for Caterpillar to acquire distributorships Eqstra NH Equipment (Pty.) Ltd. and Eqstra Botswana (Pty) Ltd. was also transferred to Barloworld through the transaction.
Barloworld values Wednesday's deal at about $175 million. It will gain 470 employees through the purchase.
The deal should close in the third quarter, pending customary closing conditions and required regulatory approval.
Caterpillar has moved to shed several Bucyrus-related assets as well as attempt to build up capital after its deal for Bucyrus International, its largest acquisition ever.
It sold Bucyrus' Australian assets to Malaysia's Sime Darby Bhd for $360 million on Dec. 14. About a month later, on Jan. 18, Caterpillar sold South American and Canadian distribution operations to Finning International Inc. for $465 million.
On April 12, Caterpillar sold another Australian distribution unit to that country's WesTrac Pty. Ltd. for $400 million.
Caterpillar also sold a 65% stake of Caterpillar Logistic Services LLC to buyout shop Platinum Equity LLC for $750 million on May 10. Caterpillar will retain a 35% stake in the logistics business, which provides logistical services for about 50 industrial customers worldwide.
Caterpillar spokeswoman Bridget Young declined comment. Barloworld didn't return calls Wednesday.
Caterpillar was founded in 1925 and has a market value of about $58.7 billion. Its shares were down $2.16, or 2.33%, to $90.36.
Barloworld was founded in 1902 and has operations in 27 countries. Its shares, which trade on the Pink Sheets, were down 51 cents, or about 5%, to $9.74, on Wednesday afternoon. It has a market value of about $2.3 billion.
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