PEORIA, Ill. and SOUTH MILWAUKEE, Wis., Nov. 15, 2010 /PRNewswire-FirstCall/ --
Caterpillar Inc. (NYSE: CAT) and Bucyrus International, Inc.
(Nasdaq: BUCY) announced today they have entered into an agreement
under which Caterpillar will acquire Bucyrus International in a
transaction valued at approximately $8.6
billion (including net debt). The acquisition is based
on Caterpillar's key strategic imperative to expand its leadership
in the mining equipment industry, and positions Caterpillar to
capitalize on the robust long-term outlook for commodities driven
by the trend of rapid growth in emerging markets which are
improving infrastructure, rapidly developing urban areas and
industrializing their economies.
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Under the terms of the transaction, which has been approved by
the boards of directors of both companies, Bucyrus shareholders
will receive $92 per share,
$7.6 billion in aggregate consisting
of all cash. The transaction represents an implied premium of 32
percent to Bucyrus' share price as of November 12, 2010. Caterpillar will fund the
acquisition through a combination of cash from the balance sheet,
debt and up to $2 billion in equity.
The transaction is expected to close in mid-2011. Caterpillar
intends to locate its mining business headquarters in South Milwaukee, Wisconsin, where Bucyrus
headquarters is currently located, and maintain the Bucyrus brand
for the principal Bucyrus legacy products.
"For several years, mining customers have been asking us to
expand our range of products and services to better serve their
increasingly complex requirements," said Caterpillar Chairman and
CEO Doug Oberhelman. "This
announcement says to those customers, we heard you loud and clear.
It is a strong statement about our belief in the bright
future of the mining industry. Our strategy calls for disciplined
investment in attractive industries that value our product and
service delivery model," Oberhelman said. "Our performance
through the global economic turmoil of 2008-2009 allowed us to
emerge with a strong balance sheet and the ability to make
strategic investments in companies like Bucyrus. This, and
other recent acquisitions, will position Caterpillar for industry
leadership and will be positive for our stockholders, customers and
employees."
Tim Sullivan, Bucyrus President
and CEO, said, "This is an outstanding and financially compelling
transaction for our shareholders. More fundamentally, it is a
testament to the tremendous value our talented team of employees
has created over the past several years and to the strength of our
brand in the global mining machinery marketplace. I am
confident that we have found an excellent partner in Caterpillar.
Caterpillar is a first-rate global company and it shares our
commitment to providing innovative products and exceptional service
to customers, creating a collaborative and safe work environment
for employees and minimizing the impact on the environment.
We are very pleased that Caterpillar has committed to locate
its mining business headquarters in Milwaukee and we are confident that the
combined global platform will be extremely well positioned to
capitalize on the substantial growth opportunities in this market
in the years ahead."
The closing of the transaction is subject to regulatory
approvals, customary closing conditions and approval by Bucyrus
stockholders. At that time, Caterpillar Group President
Steve Wunning will have executive
office accountability for Bucyrus, along with his current
responsibilities for the company's mining business.
"Even today at mine sites around the world, our customers are
using Bucyrus shovels to load Caterpillar mining trucks," Wunning
said. "This combination, as well as the significant expansion
in products and facility capacity already announced, gives us the
opportunity to expand the range of surface and underground mining
products and solutions offered to customers by Caterpillar and its
dealer network."
A driving motivation for the transaction is Caterpillar's
estimate of more than $400 million in
annual synergies beginning in 2015 derived from the combined
financial strength and complementary product offerings of the
combined mining equipment businesses.
Synergies driven by the acquisition include:
- Market leading sales and support capabilities of Caterpillar
dealers and a broad, one-stop shop for global mining customers
- Caterpillar Remanufacturing products and services for Bucyrus
equipment
- Caterpillar engines and components to enhance performance and
lower owning and operating costs for Bucyrus equipment
- Additional scale and cost efficiencies in areas such as
purchasing and engineering
- Deployment of manufacturing best practices through the
Caterpillar Production System
Advisors:
J.P. Morgan Securities LLC served as exclusive financial advisor
for Caterpillar and has provided committed financing for the
transaction. Mayer Brown LLP, Sidley Austin LLP and Howrey LLP
served as legal advisors for Caterpillar.
Deutsche Bank Securities Inc. and UBS Investment Bank served as
financial advisors for Bucyrus. Sullivan & Cromwell LLP
and Arnold & Porter LLP served as legal advisors for
Bucyrus.
Teleconference and webcast access:
Caterpillar and Bucyrus will conduct a real-time teleconference
to discuss this acquisition. The call will begin at 11 a.m. Central Standard Time on Monday, November 15, 2010. The one-hour
conference call can be accessed by telephone from both domestic and
international locations, with a listen-only entry code provided
below:
Conference Call
Number:
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877-216-8554
(domestic)
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|
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973-528-0009
(international)
|
|
Listen Only Entry
Code:
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5621
|
|
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|
To access a telephone replay of this call, please dial
800-332-6854 (for domestic callers) and 973-528-0005 (for
international callers) and enter 56211 as the conference ID.
The call can also be accessed in real-time through
http://www.CAT.com/IRwebcast.
Listeners should go to the website at least 15 minutes before
the live event to download and install any necessary audio
software. The transcript from the conference call and slides
used in the call will be made available on
http://www.CAT.com/IRwebcast.
About Caterpillar:
For more than 85 years, Caterpillar Inc. has been making
progress possible and driving positive and sustainable change on
every continent. With 2009 sales and revenues of $32.396 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. More information is
available at: http://www.cat.com.
About Bucyrus International, Inc.
Bucyrus is a world leader in the design and manufacture of high
productivity mining equipment for the surface and underground
mining industries. Bucyrus' surface mining equipment is used for
mining coal, copper, iron ore, oil sands and other minerals.
Bucyrus' underground mining equipment is used primarily for mining
coal and also used in mining minerals such as potash and trona. In
addition to machine manufacturing, Bucyrus manufactures high
quality OE parts and provides world-class support services for
their machines. Bucyrus' corporate headquarters is located in
South Milwaukee, Wisconsin,
USA.
Caterpillar Forward-Looking Statements
Certain statements in this presentation relate to future events
and expectations and, as such, constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are subject to known and
unknown factors that may cause actual results of Caterpillar Inc.
to be different from those expressed or implied in the
forward-looking statements. 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 Caterpillar does not undertake to update its forward-looking
statements.
It is important to note that actual results of the company may
differ materially from those described or implied in such
forward-looking statements based on a number of factors, including,
but not limited to: (i) the possibility that the proposed
transaction with Bucyrus does not close for any reason, including,
but not limited to, a failure to obtain required regulatory
approvals, (ii) inability to successfully integrate or achieve
expected benefits, including synergies of the Bucyrus transaction
(iii) economic volatility in the global economy generally and in
capital and credit markets; (iv) Caterpillar's ability to generate
cash from operations, secure external funding for operations and
manage liquidity needs; (v) adverse changes in the economic
conditions of the industries or markets Caterpillar serves; (vi)
government regulations or policies, including those affecting
interest rates, liquidity, access to capital and government
spending on infrastructure development; (vii) commodity price
increases and/or limited availability of raw materials and
component products, including steel; (viii) compliance costs
associated with environmental laws and regulations; (ix)
Caterpillar's and Cat Financial's ability to maintain their
respective credit ratings, material increases in either company's
cost of borrowing or an inability of either company to access
capital markets; (x) financial condition and credit worthiness of
Cat Financial's customers; (xi) material adverse changes in our
customers' access to liquidity and capital; (xii) market acceptance
of Caterpillar's products and services; (xiii) effects of changes
in the competitive environment, which may include decreased market
share, lack of acceptance of price increases, and/or negative
changes to our geographic and product mix of sales; (xiv)
Caterpillar's ability to successfully implement Caterpillar
Production System or other productivity initiatives; (xv)
international trade and investment policies, such as import quotas,
capital controls or tariffs; (xvi) failure of Caterpillar or Cat
Financial to comply with financial covenants in their respective
credit facilities; (xvii) adverse changes in sourcing practices for
our dealers or original equipment manufacturers; (xviii) additional
tax expense or exposure; (xix) political and economic risks
associated with our global operations, including changes in laws,
regulations or government policies, currency restrictions,
restrictions on repatriation of earnings, burdensome tariffs or
quotas, national and international conflict, including terrorist
acts and political and economic instability or civil unrest in the
countries in which Caterpillar operates; (xx) currency
fluctuations, particularly increases and decreases in the U.S.
dollar against other currencies; (xxi) increased payment
obligations under our pension plans; (xxii) inability to
successfully integrate and realize expected benefits from
acquisitions; (xxiii) significant legal proceedings, claims,
lawsuits or investigations; (xxiv) imposition of significant costs
or restrictions due to the enactment and implementation of health
care reform legislation and financial regulation legislation; (xxv)
changes in accounting standards or adoption of new accounting
standards; (xxvi) adverse effects of natural disasters; and
(xxvii) other factors described in more detail under "Item 1A.
Risk Factors" in Part I of our Form 10-K filed with the SEC
on February 19, 2010 for the year
ended December 31, 2009 and in Part
II of our Form 10-Q filed with the SEC on May 3, 2010 for the quarter ended March 31, 2010. These filings are available
on our website at www.cat.com/sec_filings.
Additional Information Relating to Bucyrus and Where to Find
It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of Bucyrus by Caterpillar. In
connection with the proposed merger, Bucyrus intends to file
relevant materials with the Securities and Exchange Commission (the
“SEC”), including a proxy statement on Schedule 14A, which will be
mailed to stockholders of Bucyrus.
Bucyrus stockholders are urged to read all relevant documents
filed with the SEC, including the proxy statement, because they
will contain important information about the proposed
transaction.
Investors and security holders will be able to obtain free
copies of the proxy statement (when available), as well as other
filed documents, without charge, at the SEC’s website
(http://www.sec.gov). Free copies of Bucyrus’s filings may be
obtained by directing a request to Bucyrus’s Investor Relations by
telephone to (414)768-4000, in writing to Bucyrus, Attention:
Investor Relations, 1100 Milwaukee Avenue, South Milwaukee, WI 53172, by email to
amalingowski@bucyrus.com or at Bucyrus’s website
(http://www.bucyrus.com).
Bucyrus and its directors and executive officers may be deemed,
under SEC rules, to be participants in the solicitation of proxies
from the stockholders of Bucyrus with respect to the proposed
transaction. More detailed information regarding the identity of
the potential participants, and their direct or indirect interests,
by securities holdings or otherwise, will be set forth in the proxy
statement and other materials to be filed with the SEC in
connection with the proposed transaction. Information regarding
Bucyrus’s directors and executive officers is also available in
Bucyrus’s definitive proxy statement for its 2010 Annual Meeting of
Stockholders filed with the SEC on March 12,
2010. These documents are available free of charge at
the SEC’s web site at http://www.sec.gov and from Investor
Relations at Bucyrus.
Caution Concerning Forward-Looking Statements Relating
to Bucyrus
Statements in this communication that relate to Bucyrus’s future
plans, objectives, expectations, performance, events and the like
may constitute “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Future events, risks
and uncertainties, individually or in the aggregate, could cause
our actual results to differ materially from those expressed or
implied in these forward-looking statements. These forward-looking
statements may be identified by the use of predictive, future tense
or forward-looking terminology, such as “believes,” “anticipates,”
“expects,” “estimates,” “intends,” “may,” “will” or similar terms.
The material factors and assumptions that could cause actual
results to differ materially from current expectations include,
without limitation, the following: (1) the inability to close the
merger in a timely manner; (2) the inability to complete the merger
due to the failure to obtain stockholder approval and adoption of
the merger agreement and approval of the merger or the failure to
satisfy other conditions to completion of the merger, including
required regulatory approvals; (3) the failure of the transaction
to close for any other reason; (4) the effect of the announcement
of the transaction on Bucyrus’s business relationships, operating
results and business generally; (5) the possibility that the
anticipated synergies and cost savings of the merger will not be
realized, or will not be realized within the expected time period;
(6) the possibility that the merger may be more expensive to
complete than anticipated, including as a result of unexpected
factors or events; (7) diversion of management’s attention from
ongoing business concerns; (8) general competitive, economic,
political and market conditions and fluctuations; (9) actions taken
or conditions imposed by the governmental or regulatory
authorities; (10) adverse outcomes of pending or threatened
litigation or government investigations; (11) the impact of
competition in the industries and in the specific markets in which
Bucyrus operates; and (12) other factors that may affect future
results of the combined company described in the section entitled
“Risk Factors” in the proxy statement to be mailed to Bucyrus’s
stockholders Bucyrus’s filings with the SEC that are available on
the SEC’s web site located at http://www.sec.gov, including the
section entitled “Risk Factors” in Bucyrus’s Annual Report on Form
10-K for the fiscal year ended December 31,
2009. Readers are strongly urged to read the full
cautionary statements contained in those materials. All
forward-looking statements attributable to Bucyrus are expressly
qualified in their entirety by the foregoing cautionary statements.
We assume no obligation to update any forward-looking statements to
reflect events that occur or circumstances that exist after the
date on which they were made.
SOURCE Caterpillar Inc.