Cat Finalizes EMD Buy
Caterpillar’s Progress Rail Services announced it has finalized the purchase of Electro-Motive Diesel (EMD) for $820 million in cash, plus a net working capital adjustment subject to post-closing finalization, which is currently estimated at approximately $108 million, from Berkshire Partners LLC and Greenbriar Equity Group LLC.
Effective with the closing of the acquisition, EMD is now a wholly-owned subsidiary of Progress Rail. Progress Rail in turn, is a wholly-owned subsidiary of Caterpillar Inc. Progress Rail Services is one of the largest providers of rail and transit products and services in North America, including: locomotive upgrade and repair, railcar remanufacturing, trackwork, rail welding, rail repair and replacement, signal design and installation, maintenance of way equipment, parts reclamation and recycling.
With 2009 revenues of $1.8 billion, EMD has the largest installed base of diesel-electric locomotives in the world, Cat said, and offers a range of locomotive products in the rail and transit industry. "The acquisition of EMD is a natural fit as it supports our enterprise strategy to aggressively grow our Energy Power Systems business, of which the rail industry is an important component," said Caterpillar Vice Chairman and CEO Doug Oberhelman.
Cat said EMD will remain headquartered in LaGrange, Ill. John Hamilton will continue as president and CEO of EMD and will report to Progress Rail CEO Billy Ainsworth.