By Rhiannon Hoyle
SYDNEY--Seven Group Holdings Ltd. (SVW.AU) said it will buy
Caterpillar Inc.'s (CAT) mining-product distribution and support
business in northeastern China in a deal worth US$130 million.
The acquisition will give Seven Group's heavy-machinery unit
WesTrac China Ltd. the right to sell Caterpillar mining products in
the country's northeast provinces as well as support services and
maintenance, the company said Tuesday.
"China produces almost half of the world's coal, with a forecast
to grow, [so] there is a tremendous opportunity for both
Caterpillar and WesTrac to partner and grow alongside our mining
customers in that country," said Steve Wunning, a Caterpillar group
president. Caterpillar produces mining equipment like dump trucks
and excavators.
Seven Group Chief Executive Don Voelte said the acquisition
would "significantly increase the opportunities for WesTrac's
future growth in China."
The deal, which is expected to be finalized by the end of June,
will be funded through a new five-year debt facility, Seven Group
said.
"The acquisition is expected to be largely earnings per share
neutral for the remainder of the financial year ending June 30,
2014, and accretive thereafter," Seven Group said in the statement.
It forecast revenue of US$210 million-US$250 million from the
business in the fiscal year through June 2015.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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