Caterpillar is to sell a 65 per cent stake in Caterpillar Logistics Services LLC, its third party logistics business, to Platinum Equity in a deal worth $750m.
Under the terms of the agreement, Caterpillar would retain a 35 per cent stake. The transaction is expected to close in the third quarter of 2012.
In the UK, Cat Logistics provides integrated supply chain services that incorporate information technology, warehouse management, transport management, inventory management and product support.
Its main UK operation is a 200,000 square metre site at Leicester. Other facilities are located in Lichfield, Hemel Hempstead, Manchester, Peterborough, Peterlee and Wakefield.
“The sale of the third party logistics business would be a key step in the execution of our enterprise strategy. This event enables Caterpillar to increase its focus on our core business that aligns with our strategic business model,” said Stu Levenick, Caterpillar group president with responsibility for customer & dealer support.
Over the past 25 years, the third party logistics business has provided logistics service to more than 50 customers worldwide in a number of different industries. 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, Solar, as well as for Caterpillar Japan.[asset_ref id=”1602″]
Platinum Equity Partner Jacob Kotzubei said: “We have a lot of experience owning and operating businesses that provide complex supply-chain solutions. We know what customers expect, and we share Cat Logistics’ commitment to the highest levels of service and dependability.”
Platinum Equity is no stranger to the logistics business. In November 2003, it bought Hays Logistics from Hays plc for $170m (£105m). It renamed the business ACR Logistics and two years later sold it to Kuehne + Nagel for 500m euros (£400m).
The proposed sale does not affect Caterpillar manufacturing logistics and transport operations and Cat brand parts distribution; they will continue as core businesses within Cat Logistics.