domain-b.com : Platinum Equity to acquire 65 % in Caterpillar Logistics for $750 million

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Platinum Equity to acquire 65 % in Caterpillar Logistics for $750 million news


11 May 2012

Platinum Equity, a US-based private equity investment firm, yesterday agreed to acquire a 65-per cent stake in the world's largest construction and mining equipment maker Caterpillar's third-party logistics unit for about $750 million.

Peoria, Illinois-based Caterpillar will retain a 35-per cent interest in Caterpillar Logistics Services and focus on expanding its ''core'' business, the company said in a statement.

As part of the sale agreement, Platinum will oversee distribution for engine businesses owned by Caterpillar, including Perkins engines, Solar turbine engines and FG Wilson power generators. Caterpillar will continue to operate the distribution for its Caterpillar-branded parts and equipment.

The proposed sale does not impact Caterpillar's manufacturing logistics and transportation operations and the Cat brand parts distribution, which will continue as core businesses within Cat Logistics.

Platinum Equity partner Jacob Kotzubei said that the investment is a perfect fit for Platinum given the firm's significant experience in executing carve-out transactions and operating logistics businesses.

"We have a lot of experience owning and operating businesses that provide complex supply-chain solutions," said Kotzubei. "We know what customers expect, and we share Cat Logistics' commitment to the highest levels of service and dependability."

"The sale of the third party logistics business would be a key step in the execution of our enterprise strategy. This event enables Caterpillar to increase its focus on our core business that aligns with our strategic business model," said Stu Levenick, Caterpillar group president.

Beverley Hills, California-based Platinum Equity has a diversified capital base that includes the assets of its portfolio companies, and capital commitments from institutional investors.

Since 1995, Platinum Equity has acquired over 115 businesses across a range of industries, including IT, telecommunications, logistics and distribution, industrials, manufacturing, media, real estate and automotive.