After signing an acquisition agreement with Gremada industries on 15 June, manufacturer of construction and mining equipment, Caterpillar today said that it would acquire certain assets of Gremada Industries.
The deal is expected to close upon completion of legal and regulatory requirements.
Gremada Industries is a leader in the processes of remanufacturing and reclaiming metal parts and components used in transmissions, torque converters and final drives. Gremada provides service support for off-highway equipment used in the mining and petroleum industries, and it has extensive experience providing remanufacturing expertise for equipment used for petroleum drilling applications.
"With Caterpillar's leadership and extensive experience in the remanufacturing, mining and petroleum industries, this acquisition is an ideal strategic fit for our continued growth in our services businesses," said Steve Fisher, Caterpillar vice president with responsibility for remanufacturing. "By adding Gremada, we will increase our overall product and service offerings for our existing customers while providing a platform for future growth opportunities for Cat Reman. Our competencies of core management and salvage technology, leveraged with Gremada's process efficiency and remanufacturing expertise, positions us well for future growth."
Privately held Gremada is based in West Fargo, North Dakota, and has another nearby primary location in Fargo, North Dakota. The company has more than 200 employees, who will become part of Caterpillar's remanufacturing division following the closing of the deal. Financial details of the agreement are not being disclosed.
"As a long-time supplier, we understand and appreciate Caterpillar's commitment to quality and excellence," said Greg Butler, president and CEO of Gremada Industries, Inc. "We are excited about the opportunities this acquisition provides for our employees who will benefit from joining one of the largest and best known companies in the world."
The acquired businesses will join 16 other Caterpillar remanufacturing facilities located in the United States, Mexico, Europe and Asia. Caterpillar is one of the largest remanufacturers, recycling more than 2 million pounds of material annually. It uses state-of-the-art remanufacturing technology to recycle used products, such as engines and transmissions, into like-new components.
"The acquisition of Gremada Industries further strengthens Cat Reman's position as the world's leading remanufacturer," said Doug Oberhelman, Caterpillar group president. "It also provides added support to the mining and petroleum industries, which are undergoing significant growth and capacity expansion due to an increase in commodity prices and global demand for commodities. Around the world, Caterpillar and our dealers serve customers in these industries by providing best-in-class products and support which means more up-time in the field. Applying additional discipline and focus in this area will drive cost synergies as well as improved product quality and support," Oberhelman added.
With 2007 sales and revenues of $44.958 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services.