Caterpillar buying out Bucyrus mining for $ 7.6 billion

Bucyrus mining equipment has accepted a deal for a full purchase of their business. Caterpillar equipment manufacturers can be investing $ 7.6 billion on the purchase. You will find big machines, engines, and plenty of equipment already built by Caterpillar. Mining gear is a growth industry. Caterpillar hopes to capitalize on this with their purchase of Bucyrus. Source for this article – Caterpillar spending $ 7.6 billion on Bucyrus mining equipment by Personal Money Store.
Bucyrus
The mining-equipment manufacturer is exactly what Bucyrus is. In 2009, Bucyrus did about $2.65 billion in business while employing 7,000 individuals in South Milwaukee, Wis.. It manufactures equipment to be used in both surface and underground mining for coal, gold, copper and other high-value minerals around the globe. Digging typically includes Bucyrus gear in some way. Even the Panama Canal used it.
Bucyrus value according to Caterpillar
Bucyrus has been interested in expansion. In the last few years, that's exactly what it has worked on. DBT GmbH and Terex Mining both made deals with Bucyrus in 2007 and 2010. 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. It could be financed with debt, equity and money through a corporate no fax loansfor the $7.6 billion offer. Caterpillar is relying on the “cheap financing” from low interest rates available in banks.
Information connection with the Bucyrus/Caterpillar offer
The offer between Bucyrus and Caterpillar is orchestrated in such a way that Caterpillar may be able to take advantage of the growing business of mining and the world’s heavy appetite for metals, rare-earth minerals and mined goods. After-market parts and services is where Bucyrus gets 2 thirds of its sales while only one third comes from the first sale of the merchandise. There’s a major growth industry there. Caterpillar will now work in it. This may also help vertically integrate Caterpillar — meaning the company will not only provide the trucks and large gear for mining online websites but the gear that will be pulling minerals out of the ground.
Articles cited
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/