Platinum Equity has acquired a majority interest in Caterpillar Logistics Services. Caterpillar will retain a 35 percent equity stake in the business. The transaction is valued at approximately $750 million. Caterpillar is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
PRESS RELEASE
Caterpillar Inc. CAT -1.85% and Platinum Equity announced today that Platinum Equity’s acquisition of a majority interest in Caterpillar Logistics Services has been completed. Caterpillar will retain a 35 percent equity stake in the business. The overall transaction is valued at approximately $750 million.
Caterpillar Logistics Services is the third party logistics division of Caterpillar’s wholly owned subsidiary, Caterpillar Logistics Inc. (Cat Logistics). Platinum intends to establish the business as a standalone company under a new brand that will be announced at a later date.
“The sale of the third party logistics business was driven by the strategic focus on the significant growth opportunities in our company’s core businesses,” said Steve Larson, vice president of Caterpillar and chairman and president of Cat Logistics. “We are very proud of the outstanding team that has delivered value to customers around the world for more than 25 years, and believe that in Platinum Equity we have picked the right partner to ensure strong growth and continued success for the business going forward.”
Platinum Equity Partner Jacob Kotzubei is excited about the prospects for the business under new ownership.
“Caterpillar Logistics Services has tremendous opportunity ahead of it, with dedicated employees, a rich history of innovation and a compelling customer value proposition,” said Kotzubei. “We look forward to building on that tradition while establishing a new identity and propelling the company to new levels of success.”
A team that includes Platinum in-house operations specialists is focused on transitioning the newly acquired business. A rebranding initiative is underway, and a new corporate name and image will be announced as that process unfolds.
“It is with great confidence and excitement that our business begins our new journey today. I look forward to expanding our service offerings and continuing to provide world class, innovative logistics solutions to our current and future clients,” said Dan Spellman, president and chief operating officer of Caterpillar Logistics Services LLC. “I am excited to work with Platinum Equity as our new majority owners. Their expertise executing seamless corporate carve-outs and their commitment to operational excellence will be great assets to our company.”
The sale does not impact Caterpillar manufacturing logistics and transportation operations or Cat brand parts distribution. These services will continue as core businesses within Cat Logistics. As part of the sale to Platinum Equity, the divested third party logistics business will continue to provide logistics services for non Cat branded parts including FG Wilson, Perkins, Solar, as well as for Caterpillar Japan.
About Platinum Equity:
Platinum Equity is a global M&A&O® firm specializing in the merger, acquisition, and operation of companies that provide services and solutions to customers in a broad range of business markets, including information technology, telecommunications, logistics, metals services, manufacturing, and distribution. Since its founding in 1995 by Tom Gores, Platinum Equity has completed over 130 acquisitions.
About Caterpillar:
For more than 85 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. With 2011 sales and revenues of $60.138 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services.
Forward-Looking Statements
Certain statements in this press release relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,” “could,” “should” or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance, and we do not undertake to update our forward-looking statements.
Caterpillar’s actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global economic conditions and economic conditions in the industries and markets we serve; (ii) government monetary or fiscal policies and infrastructure spending; (iii) commodity or component price increases and/or limited availability of raw materials and component products, including steel; (iv) our and our customers’, dealers’ and suppliers’ ability to access and manage liquidity; (v) political and economic risks and instability, including national or international conflicts and civil unrest; (vi) our and Cat Financial’s ability to: maintain credit ratings, avoid material increases in borrowing costs, and access capital markets; (vii) the financial condition and credit worthiness of Cat Financial’s customers; (viii) inability to realize expected benefits from acquisitions and divestitures, including the acquisition of Bucyrus International, Inc.; (ix) international trade and investment policies; (x) challenges related to Tier 4 emissions compliance; (xi) market acceptance of our products and services; (xii) changes in the competitive environment, including market share, pricing and geographic and product mix of sales; (xiii) successful implementation of capacity expansion projects, cost reduction initiatives and efficiency or productivity initiatives, including the Caterpillar Production System; (xiv) sourcing practices of our dealers or original equipment manufacturers; (xv) compliance with environmental laws and regulations; (xvi) alleged or actual violations of trade or anti-corruption laws and regulations; (xvii) additional tax expense or exposure; (xviii) currency fluctuations; (xix) our or Cat Financial’s compliance with financial covenants; (xx) increased pension plan funding obligations; (xxi) union disputes or other employee relations issues; (xxii) significant legal proceedings, claims, lawsuits or investigations; (xxiii) compliance requirements imposed if carbon emissions legislation and/or regulations are adopted; (xxiv) changes in accounting standards; (xxv) failure or breach of IT security; (xxvi) adverse effects of natural disasters; and (xxvii) other factors described in more detail under “Item 1A. Risk Factors” in our Form 10-K filed with the SEC on February 21, 2012 for the year ended December 31, 2011.
SOURCE Caterpillar Inc.
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