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Announcement regarding the proposed acquisition from subsidiaries of Caterpillar Global Mining
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Income Tax Registration number 9000/051/71/5)
(Share code: BAW)
(JSE ISIN: ZAE000026639)
(Share code: BAWP)
(JSE ISIN: ZAE000026647)
(Bond issuer code: BIBAW)
("Barloworld” or “the Company")
Announcement regarding the proposed acquisition and assumption by subsidiaries of
Barloworld of assets and liabilities relating to the Bucyrus distribution and support
business in Russia from subsidiaries of Caterpillar Global Mining
1. Introduction
Shareholders are advised that Barloworld’s subsidiaries Vostochnaya Technica UK
Limited (“VT UK”), Barloworld Equipment UK Limited (“BE UK”) and Barloworld
Holdings PLC (“Barloworld Holdings”) (“Barloworld Subsidiaries”) entered into an
agreement on 9 November 2012 with Caterpillar Global Mining LLC (“CGM”), for the
acquisition and assumption of the assets and liabilities referred to in paragraph 3
below.
2. Rationale
In July 2011 Caterpillar Inc acquired all the shares of Bucyrus International Inc for
USD 8.8 billion. Bucyrus Inc and its subsidiaries (“Bucyrus”) are global
manufacturers and distributors of a range of mining equipment which complements
the Caterpillar mining product range.
Bucyrus largely adopted a factory direct business model and owned distribution
businesses around the world. Caterpillar Inc and its subsidiaries, on the other hand,
follow a dealership model throughout the global organisation and have offered their
mining dealers the opportunity to acquire the former Bucyrus distribution businesses
in their respective Caterpillar dealership territories.
Barloworld announced on 30 May 2012 the acquisition of Bucyrus distribution
businesses in South Africa and Botswana from subsidiaries of CGM and subsidiaries
of Eqstra Holdings Limited, for a total purchase consideration of USD175 000 000.
Following the completion of the southern African transaction, Barloworld and the
Barloworld Subsidiaries have negotiated with CGM the acquisition and assumption of
assets and liabilities relating to the Bucyrus distribution and support business in
Barloworld’s dealership territories in the Siberian and Far East Regions of the
Russian Federation (“VT Dealer Territory”). On the closing of the transaction, VT UK
and Vostochnaya Technica LLC (“Barloworld Russia”) will be entitled to distribute the
extended product range throughout the VT Dealer Territory.
The proposed acquisition enables Barloworld and its subsidiaries to offer their
customers in the VT Dealer Territory a comprehensive range of surface and
underground mining equipment and support services.
3. Terms of the transaction
3.1 The Barloworld Subsidiaries and CGM have concluded an asset purchase
agreement for the purchase:
3.1.1 by Barloworld Russia of the tangible assets relating to the mining
equipment sales (including promotion and marketing activities),
distribution and aftermarket sales, service and support business
conducted by “Bucyrus Service” in the VT Dealership Territory (“the
Business”); and
3.1.2 by VT UK of certain intangibles relating to the Business.
3.2 The tangible assets to be acquired by Barloworld Russia comprise property,
movable fixed assets and parts inventory. VT UK and Barloworld Russia will
also acquire rights and assume obligations in terms of certain on-going
contracts relating to the Business.
3.3 The transaction is expected to be implemented on 3 December 2012. The
purchase consideration is USD50 000 000, subject to adjustments for
working capital as at the date of closing of the transaction. BE UK and
Barloworld Holdings have given guarantees, whereby BE UK and Barloworld
Holdings guarantee the performance by Barloworld Russia and VT UK of
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their obligations under the transaction.
3.4 The purchase price for the tangible assets in Russia will be paid in Roubles,
converted from USD. Other amounts will be paid in USD.
3.5 Based on the purchase price of this transaction and the southern Africa
transaction, this is a Category 2 transaction in terms of the Listings
Requirements of the JSE Limited.
3.6 The closing of the transaction is subject, inter alia, to the execution and
delivery of transfer documents governed by Russian law.
4. Pro forma financial information
The pro forma financial effects of the acquisition on the results for the six months
ended 31 March 2012 are not significant.
Date: 9 November 2012
Sponsor:
J.P Morgan Equities Ltd.
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