Caterpillar to Acquire Bucyrus Building mining equipment Firm With Unmatched Item Range, Unrivaled Consumer Support; Highly Complementary Mixture Expected to Drive Robust Synergies
PEORIA, Ill. and SOUTH MILWAUKEE, Wis. - Caterpillar Inc. (NYSE: CAT) and Bucyrus International, Inc. (Nasdaq: BUCY) announced currently they have entered into an agreement under which Caterpillar will acquire Bucyrus International in a transaction valued at roughly $8.six billion (such as net debt). The acquisition is according to Caterpillar's key strategic imperative to expand its leadership within the mining equipment sector, and positions Caterpillar to capitalize on the robust long-term outlook for commodities driven by the trend of rapid growth in emerging markets that are improving infrastructure, rapidly establishing urban areas and industrializing their economies.
Under the terms from the transaction, which has been approved by the boards of directors of each organizations, Bucyrus shareholders will receive $92 per share, $7.6 billion in aggregate consisting of all cash. The transaction represents an implied premium of 32 percent to Bucyrus' share cost as of November 12, 2010. Caterpillar will fund the acquisition by means of a combination of money from the balance sheet, debt and up to $2 billion in equity. The transaction is expected to close in mid-2011. Caterpillar intends to locate its mining company headquarters in South Milwaukee, Wisconsin, where Bucyrus headquarters is at present situated, and preserve the Bucyrus brand for the principal Bucyrus legacy items.
"For many years, mining clients have been asking us to expand our range of goods and services to greater serve their increasingly complex specifications," stated Caterpillar Chairman and CEO Doug Oberhelman. "This announcement says to those prospects, we heard you loud and clear. It is a robust statement about our belief in the bright future of the mining industry. Our technique calls for disciplined investment in desirable industries that value our product and service delivery model," Oberhelman stated. "Our performance through the global economic turmoil of 2008-2009 allowed us to emerge having a powerful balance sheet and the capacity to produce strategic investments in firms like Bucyrus. This, along with other recent acquisitions, will position Caterpillar for market leadership and are going to be positive for our stockholders, customers and workers." gold crusher South Africa
Tim Sullivan, Bucyrus President and CEO, stated, "This is an outstanding and financially compelling transaction for our shareholders. A lot more fundamentally, it's a testament for the tremendous value our talented team of personnel has designed more than the past many years and to the strength of our brand inside the global mining machinery marketplace. I'm confident that we have found a great partner in Caterpillar. Caterpillar is really a first-rate international organization and it shares our commitment to supplying innovative solutions and exceptional service to shoppers, making a collaborative and safe work atmosphere for employees and minimizing the impact on the atmosphere. We are extremely pleased that Caterpillar has committed to find its mining small business headquarters in Milwaukee and we're confident that the combined global platform are going to be particularly nicely positioned to capitalize on the substantial growth possibilities in this market place in the years ahead."
The closing in the transaction is subject to regulatory approvals, customary closing circumstances and approval by Bucyrus stockholders. At that time, Caterpillar Group President Steve Wunning will have executive workplace accountability for Bucyrus, in addition to his existing responsibilities for the company's mining business.
"Even nowadays at mine web-sites around the world, our prospects are working with Bucyrus shovels to load Caterpillar mining trucks," Wunning said. "This mixture, also as the significant expansion in products and facility capacity already announced, gives us the chance to expand the range of surface and underground mining items and solutions offered to clients by Caterpillar and its dealer network." gold ore crusher
A driving motivation for the transaction is Caterpillar's estimate of much more than $400 million in annual synergies starting in 2015 derived from the combined monetary strength and complementary product offerings in the combined mining equipment firms. Synergies driven by the acquisition contain:
Market top sales and assistance capabilities of Caterpillar dealers and also a broad, one-stop shop for global mining customers
Caterpillar Remanufacturing products and services for Bucyrus equipment
Caterpillar engines and components to boost performance and lower owning and operating fees for Bucyrus equipment
Additional scale and price efficiencies in areas for instance getting and engineering
Deployment of manufacturing most effective practices through the Caterpillar Production System
Advisors:
J.P. Morgan Securities LLC served as exclusive economic advisor for Caterpillar and has supplied committed financing for the transaction. Mayer Brown LLP, Sidley Austin LLP and Howrey LLP served as legal advisors for Caterpillar. Deutsche Bank Securities Inc. and UBS Investment Bank served as economic advisors for Bucyrus. Sullivan & Cromwell LLP and Arnold & Porter LLP served as legal advisors for Bucyrus.