By Roger Renstrom

Finning International Inc is exiting the forklift business.

A United Kingdom deal, announced on September 11, is expected to close on September 29.

Briggs Equipment UK Ltd has agreed to buy the business and assets of the Finning Group UK subsidiary's materials handling division for GBP85 million (USD158.6 million). Briggs UK is a subsidiary of Sammons Enterprises Inc, of Dallas, Texas, USA. Other Sammons-owned Briggs entities have significant forklift business operations in the US and Mexico.

Tom Merinsky, vice president of investor relations with Vancouver, Canada-based Finning International, said: "This sale represents a full exit from the forklift market for Finning."

Discussions between Finning and Briggs extended over several months.

Managers at Briggs had been "pursuing a UK presence for some time", Nick Lloyd, managing director of Finning Group UK, said. "The UK opportunity intrigued them. They have excellent operational people in UK and use their expertise in another area."

Lloyd said the transaction would be positive for Finning and Briggs. Briggs gained an existing platform to establish a UK business, and Finning obtained resources it could focus on other opportunities. Finning is among the world's largest Caterpillar equipment dealers. It owns Hewden, the UK's largest equipment rental business for the construction industry, and Diperk UK, a distributor of Perkins engines and parts.

The Finning UK materials handling division employs about 1,000 people, but its performance has lagged. The unit is the sole UK distributor of Caterpillar counterbalance and warehouse equipment.

Doug Whitehead, Finning president and CEO, said: "The UK financial results were not up to our standards for several years." Finning determined that materials handling equipment was not among its core businesses.

Mike Waites, Finning executive vice president and chief financial officer, said the sale price was less than the division's annual revenues. "Sammons Briggs has made a commitment to growing this business."

Finning UK's construction equipment division will continue to sell a full range of Caterpillar trucks, loaders and excavators.