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|Caterpillar Head Sees Purchase of Locomotive Maker As Way to Diversify
|A Caterpillar subsidiary's recent agreement to acquire the second largest locomotive builder in North America will position Cat well in the near future.
Caterpillar announced on June 1st that Progress Rail Services had signed a definitive agreement to purchase Electro-Motive Diesel for $820 million in cash from Berkshire Partners and Greenbriar Equity Group. E.M.D. will become a wholly owned subsidiary of Progress Rail when the deal closes, which is expected to happen by the end of this year.
Progress Rail, based in Alabama, is a subsidiary of Caterpillar that supplies remanufactured locomotive and railcar products and services to the railroad industry worldwide. Progress Rail employs over 4,300 people.
Caterpillar Chairman and Chief Executive Officer Jim Owens, who received an Honorary Doctor of Laws Degree during Knox College's Commencement on June 5th, talked about the deal after the ceremony. Owens tells WGIL it grows Caterpillar's presence in an industry that has a long-term positive outlook.
"We have been in the rail services business for quite a few years," Owens said. "Adding the locomotive business...they bring some engine technology that compliments our own engine technology, and we think it's an industry that's got terrific opportunities in the future. We look forward to growing our presence and serving customers in rail space."
Caterpillar says E.M.D. has the largest installed base of diesel-electric locomotives in the world and offers the most extensive range of locomotive products in the rail and transit industry. The company, based in LaGrange, Ilinois, generated $1.8 billion in revenue last year and is the second largest locomotive builder in North America behind General Electric.
Officials say E.M.D. will remain headquartered in LaGrange. Current president and CEO John Hamilton will continue in that role and report to Progress Rail CEO Billy Ainsworth.
(Caterpillar CEO Jim Owens receives an honorary Doctor of Laws Degree from Knox College during the June 5 commencement ceremony held inside the T. Fleming Fieldhouse. WGIL News Story and File Photo by Mike Perry.)
|06 14 10 by Newsroom
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