WESTRAC TO ACQUIRE BUCYRUS DISTRIBUTION AND SUPPORT BUSINESS FROM CATERPILLAR IN WESTERN AUSTRALIA, AUSTRALIAN CAPITAL TERRITORY AND NEW SOUTH WALES
WesTrac Pty Limited, a wholly owned subsidiary of Seven Group Holdings Limited (ASX: SVW), and Caterpillar Inc. (NYSE: CAT) today announced that the companies have reached an agreement for WesTrac to acquire from Caterpillar the distribution and support business formerly operated by Bucyrus in Western Australia, Australian Capital Territory and New South Wales. After closing, WesTrac expects to begin providing sales, service and support for former Bucyrus mining products in these territories.
The transaction is valued at approximately USD$400 million and SGH will fund the transaction through a new five year debt facility. Excluding transaction costs, the acquisition is expected to be largely EPS neutral for the remainder of the financial year ending 30 June 2012, and accretive thereafter.
WesTrac estimates the annual revenues for the Bucyrus distribution and support business to be in the range of A$600 million to A$650 million for the upcoming 2013 financial year. Following completion, WesTrac will employ approximately 430 former Bucyrus employees and contractors in facilities in Western Australia and New South Wales. Subject to customary closing conditions, it is expected the transaction will close by 30 June 2012.
“The acquisition of the Bucyrus distribution and support business will enhance our leading position in the supply and service of heavy equipment to the mining and construction sectors in Western Australia, Australian Capital Territory and New South Wales” said Mr Jim Walker, Chief Executive of WesTrac Group. “The Bucyrus product line and large installed base are a logical addition to our current range of Cat product, and will provide us with significant opportunities for future growth with our mining customers.”
“We are pleased to announce this agreement with WesTrac today as we continue to make excellent progress in the transition of the product distribution and support of former Bucyrus machinery to Cat dealers around the world,” said Steve Wunning, Caterpillar Group President with responsibility for Resource Industries. “Through our longstanding relationship
with WesTrac, we look forward to working together to deliver the best equipment solutions in the industry to our mining customers.”
Discussions are continuing between the companies in relation to the Bucyrus distribution and support businesses in the WesTrac dealership territories in North Eastern China, and a further announcement in relation to this will be made in due course.