Platinum Equity is acquiring a 65% equity stake in Caterpillar Logistics Services LLC, the third-party logistics division of its wholly owned subsidiary Caterpillar Logistics Inc.
The overall transaction is valued at approximately $750 million. Under the terms of the agreement, Caterpillar would retain a 35% equity stake. Other terms are not being disclosed.
"The sale of the third-party logistics business would be a key step in the execution of our enterprise strategy," says Stu Levenick, Caterpillar group president with responsibility for Customer & Dealer Support. "This event enables Caterpillar to increase its focus on our core business that aligns with our strategic business model."
As part of the agreement with Platinum, the third-party logistics business will continue to provide logistics services for non-Cat-branded parts, including FG Wilson, Perkins and Solar, as well as for Caterpillar Japan.
The proposed sale does not impact Caterpillar manufacturing logistics and transportation operations and Cat brand parts distribution; they will continue as core businesses within Cat Logistics. In fact, Caterpillar previously announced plans for a multiyear expansion and enhancement of the Cat parts distribution network, which, to date, has added more than four million square feet of capacity in new parts distribution centers in the U.S., Mexico and the United Arab Emirates.
The transaction is expected to close in the third quarter of 2012.