VANCOUVER, British Columbia - Finning International, a Caterpillar dealer for western Canada, the United Kingdom and Chile, has reached an agreement to acquire Hewden Stuart Plc, one of the U.K.'s largest equipment rental companies, for about US$459 million. Finning reached agreement with Hewden Stuart's board of directors on the terms of a recommended cash offer for all of HS' share capital.
Hewden Stuart, with 370 locations in England, Northern Ireland, Scotland and Wales, reported revenue of $365 million and operating profit of $61 million from continuing operations for the fiscal year ended Jan. 31, 2000. However, sources in the U.K. said the company has had recent financial problems and has been on the market for some time.
Finning sells, rents, finances and services Caterpillar equipment and allied products in western Canada, Britain and Chile. It is No. 14 on the RER 100, based on 1999 rental revenue of US$63.7 million in its Canadian operations.
Finning has made efforts to launch a Caterpillar rental program in the U.K. but had not established a solid foothold in the short-term rental market. The acquisition of Hewden Stuart immediately makes Caterpillar one of the U.K.'s leading rental players.
Through Finning's long-established U.K. presence, we know that customers require a variety of distribution channels to meet all their needs," said Douglas Whitehead, president and CEO of Finning. "Our offer will combine Finning's international equipment sales business and Hewden Stuart's market-leading small equipment rental business. ... Hewden Stuart's strong national network, its excellent employees, its modern fleet and its recognized brand name will enable us to achieve solid growth and create superior shareholder value."
It is anticipated that the acquisition of Hewden Stuart will be accretive to earnings in the first year of operations, officials said.
The agreement is subject to approval of shareholders of both companies and customary regulatory agencies.