Finning International, the world’s largest dealer of Caterpillar equipment, agreed to buy part of a distribution unit from the U.S. manufacturer for about $465 million. The business that Finning plans to acquire operates in South America, Canada, and the U.K. and was previously owned by Bucyrus International.
A Finning slide presentation said the business it’s buying is forecast to have sales of about $700 million this year, up from about $600 million projected for 2011. Finning forecasts a profit margin before interest and tax of about 8% within two to three years.
Caterpillar, the world’s largest maker of construction and mining equipment, is selling the assets as part of its integration of Bucyrus. Cat bought Bucyrus for $8.6 billion in July.