Bucyrus mining equipment being purchased by Caterpillar

In an effort to expand the company, equipment manufacturer Caterpillar is going to purchase Bucyrus mining gear. Caterpillar already has manufacturing businesses that build diesel engines to large machines. With this purchase, Caterpillar could be expanding significantly. The business will now consist of mining equipment.

The business of Bucyrus

The mining-equipment manufacturer is what Bucyrus is. In South Milwaukee Wis., Bucyrus is based. It has concerning 7,000 employees and in 2009 did about $2.65 billion in business. It’s in charge of making all the equipment for mining coal, copper and even gold worldwide underground and on the surface. Everything including the Panama canal has used Bucyrus equipment for digging.

Caterpillar’s package for Bucyrus

Bucyrus has been interested in expansion. Within the last few years, that's exactly what it has worked on. In 2007 and 2010, deals were made by Bucyrus. DBT GmbH and Terex Mining where those who made the deals. The public owns Bucyrus. Caterpillar will give stockholders $92 a share. This is regarding 30 percent above exactly what Bucyrus stocks were trading for at the time of the purchase. The deal will require cash through a payday loan no faxing to finance the $7.6 billion offer. Equity and debt will be needed too. Caterpillar is relying on the “cheap financing” from low interest rates available in banks.

Information connection with the Bucyrus/Caterpillar deal

Caterpillar can be really glad when the Bucyrus offer is over. It will mean the company can start working to mine precious metals and rare-earth minerals within the mining business. The products sold the first time at Bucyrus only pays for about one 3rd of its income. The other two thirds come from after-market parts and services that are sold. In short, Caterpillar can be expanding into a major growth industry. This will even help vertically integrate Caterpillar — meaning the business won’t only provide the trucks and large gear for mining websites but the equipment that will be pulling minerals out of the ground.

Citations

Cat.com

cat.com/products/

Bucyrus

bucyrus.com/news/article/20101115_71755.aspx

Wall Street Journal

blogs.wsj.com/deals/2010/11/15/caterpillar-deal-everything-you-wanted-to-know-about-bucyrus/