Finning International Inc., a Canadian company and Caterpillar's largest heavy equipment dealership globally, announced it has reached an agreement to purchase the operating assets of the Cat dealership of Kramer Ltd. for approximately $230 million, subject to working capital adjustments. In 2014, the acquired dealership business generated approximately $275 million in revenue. Finning will become the approved Cat dealer in Saskatchewan in July of this year, subject to customary closing conditions. After a remarkable 70 years of service in Saskatchewan, the Kramer family has decided to retire from the equipment dealership business.
This acquisition combines complementary capabilities, customer bases and highly skilled employees across Finning's territory in British Columbia, Alberta, Yukon, Northwest Territories and part of Nunavut with Kramer's presence in Saskatchewan.
The two companies already share common customers who operate across these adjacent territories and will benefit from the continuity and support of a single dealer. Customers will also benefit from improved equipment and parts availability, world-class product support and access to Finning's extensive branch network of 50 locations.
For Finning, Saskatchewan is a highly attractive growth opportunity that diversifies its revenue base into sectors such as potash and uranium. The acquisition will be funded with cash and will be immediately accretive to earnings per share.
Joining Finning is a team of 475 Kramer employees with a deep understanding of the local market and well-established customer relationships throughout the province at parts, sales and service locations in Estevan, Kindersley, Battleford, Regina, Saskatoon, Swift Current and Tisdale in addition to Cat Rental Stores in Regina and Saskatoon.
Tony de Sousa has been named the executive to lead Finning Saskatchewan. He will be based in theSaskatchewan headquarters, which will remain in Regina. Tony has been with Finning for 39 years and has extensive senior leadership experience in sales, service and operations. Tony and his family will move from Edmonton to Regina.
In support of this acquisition, Finning's financial and legal advisors were RBC Capital Markets and Borden Ladner Gervais LLP, respectively.