Caterpillar to sell majority stake of third-party logistics business

By Murray Pollok11 May 2012

Caterpillar is to sell a 65% stake in its third-party logistics division to US-based Platinum Equity for US$750 million.

The third-party distribution business, owned by Caterpillar Logistics Inc, provides logistics services to 50 Cat customers worldwide and handles logistics for non-Cat branded parts for FG Wilson, Perkins and Solar, and also for Caterpillar Japan.

Cat, which will retain a 35% stake in the business, said the sale would have no impact on its manufacturing logistics, transportation operations and Cat parts distribution, all of which will continue to be dealt with by Caterpillar Logistics.

Stu Levenick, Caterpillar group president with responsibility for customer and dealer support, said the sale was a key step in its strategy; “This event enables Caterpillar to increase its focus on our core business that aligns with our strategic business model”.

Platinum Equity partner Jacob Kotzubei said the logistics business was a perfect fit for Platinum; “We have a lot of experience owning and operating businesses that provide complex supply-chain solutions. We know what customers expect, and we share Cat Logistics’ commitment to the highest levels of service and dependability.”

Steve Larson, vice president of Caterpillar and chairman and president of Cat Logistics, said Caterpillar would work closely with Platinum “to ensure a seamless transition”.

The transaction is expected to close in the third quarter of 2012.

Platinum Equity is already involved in the construction equipment sector through its ownership of crane rental companies Maxim Crane Works.

There has also been speculation in the US press that Platinum might try to acquire Las Vegas-based rental company Ahern Rentals, which filed for bankruptcy protection at the end of 2011. Platinum holds a significant amount of Ahern debt.

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