Mining Magazine > Panorama > Finning bags Bucyrus dealership

Panorama

Finning International has announced that it will acquire from Caterpillar the distribution and support business formerly operated by Bucyrus in portions of South America, Western Canada and in the UK. After closing, Finning expects to begin providing sales, service and support for former Bucyrus mining products in all of its dealership territories.

The transaction is valued at approximately US$465 million and is expected to be accretive to Finning’s 2012 earnings.  
Mike Waites, president and CEO of Finning International commented: “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. 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.”

Steve Wunning, Caterpillar group president with responsibility for Resource Industries added: “We’re making good progress as we transition the product distribution and support of former Bucyrus machinery to Cat dealers around the world.

“Finning and Caterpillar have shared a longstanding relationship for close to 80 years, and we look forward to realising the growth opportunities created by this agreement.”
The acquired distribution and support business, which has current annual revenues of about US$600 million, includes facilities and inventory primarily in South America and Canada, as well as approximately 900 former Bucyrus employees who are expected to transition to Finning upon closing of the acquisition.

The transaction will close in two phases: in Finning South America and Finning UK and Ireland late in the March quarter of 2012, followed by Canada in the second quarter.  

In December 2011, Caterpillar announced Sime Darby Industrial had acquired a portion of the former Bucyrus distribution business encompassing the Cat dealerships operated by Hastings Deering. 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.