Caterpillar Announces Acquisition of Blount's Forestry Division and Transition of Pioneer Machinery to Six Caterpillar Dealers
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Press release date: November 5, 2007
Two deals strengthen Caterpillar's position in forestry industry
PEORIA, Ill., Nov. 5 -- Caterpillar Inc. (NYSE: CAT) and Blount International, Inc. (NYSE:BLT) announced today that Caterpillar is acquiring the assets of Blount's Forestry Division. In a separate transaction, six Caterpillar dealers have agreed in principle to acquire certain assets of Pioneer Machinery, Inc., a premier distributor of forestry products in the southeastern United States.
Expanding Manufacturing Operations
Under the agreement between Caterpillar and Blount, Caterpillar will acquire two Blount manufacturing facilities -- a sales office and a service parts warehouse and product support operation in North America as well as an assembly operation in Sweden. These operations will join Caterpillar's global facilities that produce and support forestry equipment. Since 2003, Caterpillar and Blount have had an agreement to jointly produce and market products globally under the Caterpillar and former Timberking brands.
"Caterpillar and Blount have worked closely together since our initial agreement, leveraging Caterpillar's unmatched worldwide distribution and long forestry heritage with Blount's legacy of product excellence," said John Heller, Caterpillar vice president with responsibility for forestry. "This acquisition will provide greater opportunities for integrating Caterpillar's state-of-the-art design and components into the forestry products that previously have been manufactured by Blount."
Blount International, Inc., headquartered in Portland, Oregon, is a diverse, high-performing industrial company consisting of two business segments: The Outdoor Products Group and the Industrial and Power Equipment Group, which includes its Forestry Division. For more than 50 years, Blount's Forestry Division has manufactured market-leading products such as timber harvesting and processing equipment, loaders and attachments.
"Caterpillar recognizes the value of our experienced workforce and our long history of market-leading products," said Dennis Eagan, president of Blount's Industrial and Power Equipment Group. "Our dealers and customers can expect a smooth transition of ownership and will be well served by Caterpillar."
In 2006, Caterpillar permitted Blount to replace the Timberking brand of forestry products with the Caterpillar and Cat brands. The Timberking line included products manufactured by both Caterpillar and Blount and sold exclusively through Caterpillar dealers. The acquisition of Blount's operations will bring all product design, development and manufacturing under Caterpillar.
"This acquisition supports our corporate objective to be the forestry market leader," said John Carpenter, president of Caterpillar Forest Products. "Cat Forest Products now offers the broadest product line in the industry with a full range of products and services for logging, millyard, road-building and land management. In addition to better serving the needs of our traditional forestry customers, this acquisition will also enable Caterpillar to meet the increasing global demand for wood-based alternative fuels such as cellulosic ethanol."
Strengthening Caterpillar's Customer Support Network in the Forestry Industry
In a strategic move that will better position Caterpillar to serve forestry customers in the southeastern United States, six Caterpillar dealers have agreed in principle to acquire certain assets of Pioneer Machinery. Caterpillar acquired Pioneer Machinery from private ownership in 2001, and Pioneer is currently owned by Caterpillar and the six Cat dealers whose service territories cover the same area in the southeastern United States. The Caterpillar dealers involved in the transaction are Blanchard Machinery, Carolina Cat, Carter Machinery, Gregory Poole, Ring Power, and Yancey Brothers.
"This strategic decision will provide continuity for the strong Pioneer brand while improving alignment of our forestry product distribution channel with the traditional Caterpillar dealer business model," said Bill Mayo, Caterpillar vice president with responsibility for the North American Commercial Division.
Pioneer Machinery, based in West Columbia, South Carolina, operates 23 facilities in six southeastern states.
"This enhancement to our distribution model means greater value can be provided to our customers since they will have a single source for their equipment needs," said Carpenter.
The transaction is expected to be finalized after the parties conduct a due diligence process. The transition of Pioneer's commercial operations to the respective dealers will begin as soon as definitive agreements are completed.
Pioneer sells and services all types of logging and recycling equipment, including skidders, feller bunchers, knuckleboom loaders, delimbers, slashers, chippers, log trailers, grinders, crushers, screens and site prep tractors. It also is an authorized distributor for leading forestry brands such as Caterpillar, Prentice, CTR, Peterson and CEC.
Cat Forest Products is headquartered in LaGrange, Georgia, where it manufactures wheel skidders, felling heads and track feller bunchers. Other Caterpillar plants in the Americas, Asia and Europe continue to produce forest swing machines, excavators, wheel loaders and other machines working in forests throughout the world. In addition, Caterpillar operates the Caterpillar Forest Product Training Center in Alabama -- home of Forest Pro University -- which supports the training, safety awareness and product demonstration needs of dealers, customers, associations and universities.
For more than 80 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2006 sales and revenues of $41.517 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. 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/.
Source: Caterpillar Inc.
CONTACT: Jim Dugan, Corporate Public Affairs of Caterpillar, +1-309-494-4100, or mobile, +1-309-360-7311, email@example.com
Web site: http://www.cat.com/