Canada's Finning International Inc, is buying a part of Bucyrus distribution business from construction and machinery maker Caterpillar Inc, for about $465 million in order to strengthen its presence in the mining industry.
Illinois-based Caterpillar, the world's largest construction and mining equipment maker had acquired mining equipment maker Bucyrus in an $8.6 billion-deal in July 2011 and had said it would sell the distribution business to its dealers (See: Caterpillar to acquire mining equipment maker Bucyrus for $8.6 billion).
In December, it sold part of Bucyrus distribution business to the industrial division of Malaysia's Sime Darby, for about $360 million (See: Caterpillar to sell part of Bucyrus to Malaysia's Sime Darby for $360 mn).
The sale included the Sime Darby Industrial Cat dealerships operated by Hastings Deering in Queensland and the Northern Territory of Australia, Papua New Guinea and New Caledonia.
The sale to Vancouver, British Columbia-based Finning, includes distribution and support operations in parts of South America and Western Canada and in the UK. The businesses had total annual revenue of about $600 million and its 900 employees are expected to move to Finning.
Finning, which is Caterpillar's largest dealer, said the transaction will be funded primarily through debt.
Finning deals in Caterpillar equipment, as well as selling, renting and servicing equipment and engines in Western Canada, Chile, Argentina, Bolivia, Uruguay, Ireland and the UK.
''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.