Caterpillar Inc. and Barloworld Limited today announced that Caterpillar Global Mining LLC and Barloworld have signed an agreement for Barloworld to acquire the Bucyrus equipment distribution and support business in South Africa and Botswana.
The transaction between Caterpillar and Barloworld is valued at approximately $115 million. In addition, Caterpillar Global Mining has assigned to Barloworld its agreements with Eqstra NH Equipment (Pty) Limited and Eqstra Botswana (Pty) Limited (together referred to as 'Eqstra') for the purchase of Eqstra's South Africa and Botswana Bucyrus distributorship and mining services businesses. For Barloworld, the total transaction, including the former Eqstra mining services businesses, is valued at approximately $175 million.
"We're pleased to announce this agreement today as we continue to make good progress on our 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. "Barloworld and Caterpillar have a longstanding relationship, and we look forward to realizing the growth opportunities created by this agreement."
Subject to customary closing conditions and required regulatory approvals, it is anticipated that the transaction will close in the third quarter of 2012. Upon completion of these transactions, Barloworld expects to begin providing sales, service and support for all of the former Bucyrus mining products in all its dealership territories in southern Africa.
Clive Thomson, CEO of Barloworld said, "This acquisition is perfectly aligned with the group's growth strategy. It builds on our existing strengths and will enhance our leading position in the mining industry by significantly expanding the range of equipment solutions we are able to provide to customers operating across southern Africa."
Following completion of the acquisition, approximately 470 former Bucyrus and Eqstra employees and contract workers are expected to transition to Barloworld. Discussions are continuing between the companies in relation to the former Bucyrus distribution and support businesses in the Barloworld dealership territories in Russia and Iberia. Caterpillar continues to hold discussions with other Cat dealers that have mining activity in their territories and will continue to operate the former Bucyrus distribution business until the transitions have occurred in a given territory.
To date, Caterpillar has closed similar transactions with Sime Darby Industrial and Finning International Inc. (for portions of the Bucyrus distribution and support business in South America and the U.K.). The company has also announced deals with three other dealers including Finning International Inc. (for portions of the Bucyrus distribution and support business in Canada), WesTrac Pty Limited and Ferreyros S.A.A.
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