Finning buys Kramer for $230M
May 13, 2015 by STAFF REPORT
Finning International Inc., a Canadian company and Caterpillar’s largest heavy equipment dealership globally, has reached an agreement to purchase the operating assets of the Cat dealership of Saskatchewan-based Kramer Ltd. for approximately $230 million.
“Expanding Finning’s Western Canadian operations into Saskatchewan is a great strategic fit and represents a compelling growth opportunity for our company, employees, customers and shareholders.,” said Scott Thomson , president and CEO, Finning International.
“We have great respect for the Kramer family legacy and everything they have achieved,” says Thomson. “We will build on their strong heritage by growing the business, providing our customers with a terrific experience, and contributing to communities in Saskatchewan.
“This acquisition is also a testament to our current Finning employees in Canada who have worked tirelessly to put us in the strategic and financial position to make this opportunity possible.”
In 2014, the acquired dealership business generated approximately $275 million in revenue. Finning will become the approved Cat dealer in Saskatchewan in July of this year. After a remarkable 70 years of service in Saskatchewan, the Kramer family has decided to retire from the equipment dealership business.
This acquisition combines complementary capabilities, customer bases and highly skilled employees across Finning’s territory in British Columbia, Alberta, Yukon, Northwest Territories and part of Nunavut with Kramer’s presence in Saskatchewan. The two companies already share common customers who operate across these adjacent territories and will benefit from the continuity and support of a single dealer, according to a release from Finning. Customers will also benefit from improves equipment and parts availability, product support and access to Finning’s extensive branch network of 50 locations.
For Finning, Saskatchewan is a highly attractive growth opportunity that diversifies its revenue base into sectors such as potash and uranium. The acquisition will be funded with cash and will be immediately accretive to earnings per share.
Kramer’s employee base of 475 workers will join the Finning team. “They have a deep understanding of the local market and well-established customer relationships throughout the province at parts, sales and service locations in Estevan, Kindersley, Battleford, Regina, Saskatoon, Swift Current and Tisdale in addition to Cat Rental Stores in Regina and Saskatoon,” says Thomson.
Tony de Sousa has been named the executive to lead Finning Saskatchewan. He will be based in the Saskatchewan headquarters, which will remain in Regina. De Sousa has been with Finning for 39 years and has extensive senior leadership experience in sales, service and operations.
Finning was founded in Vancouver in 1933 by Earl B. Finning. The company has approximately 5,200 employees across 50 locations in Western Canada and 14,000 globally. Finning serves customers in various industries, including mining, construction, petroleum, forestry, agriculture and a wide range of power systems applications. It was named the 2014 Technology Dealer of the Year in Canada by Trimble, a leading provider of advanced location-based solutions. Finning has 1,250 Caterpillar-trained heavy equipment technicians in Canada and operates 530 service trucks in Canada. Headquartered in Vancouver, B.C., the company operates in Western Canada, Chile, Argentina, Bolivia, Uruguay, as well as in the United Kingdom and Ireland. In 2014, Finning generated revenue of $3.6 billion in Canada; $6.9 billion globally.
Kramer was founded in 1944 by Robert (Bob) A. Kramer and has approximately 475 employees in 9 locations across Saskatchewan. Kramer serves customers in a range of industries, including construction, mining, oil and gas, forestry and agriculture. It has 160 Caterpillar-trained heavy equipment technicians and operates 38 service trucks