Finning International Inc has sold Hewden, its UK equipment rental business, for GBP110.2 million (USD164.5 million) to an affiliate of Sun European Partners LLP, the European adviser to Sun Capital Partners Inc.
Mike Waites, CEO of Finning International, says the company decided for "strategic and financial reasons" that it was in its shareholders' best interests to divest Hewden. The sale was finalised through a cash consideration of GBP90.2 million (USD134.7 million) and an interest-bearing five-year loan note receivable of GBP20 million (USD29.9 million). Finning says the acquisition money will mainly be used to reduce its debt.
"While we believe that Hewden's broad product offering, combined with our recent restructuring and national accounts focus will serve it well in the future, owning a large, short-term rental business operating separately from our UK dealership does not align with our strategic objectives," Waites explains.
He assures Finning customers that despite divesting Hewden, it remains committed to the UK Caterpillar dealership.
Finning UK's dealership will continue to work closely with its plant hire customers to supply Caterpillar equipment to the UK equipment rental market, says Andy Fraser, managing director of Finning UK Group.
"We are confident we can demonstrate the value of Finning to Hewden's new owners and maintain a productive commercial relationship with Hewden," Fraser says.
Hewden has 1,300 employees and covers 63 locations in the UK. The existing Hewden commercial centre in Manchester is proposed to be the new head office for the company.
Finning UK, headquartered in Cannock, Staffordshire, operates 20 branches in the UK with 1,470 employees serving Caterpillar dealership customers.
Finning International Inc is the world's largest Caterpillar equipment dealer. Headquartered in Vancouver, Canada, the company operates in Western Canada, Chile, Argentina, Bolivia, Uruguay and the United Kingdom.
Sun European Partners LLP is the European adviser to Sun Capital Partners Inc, a US-based investment firm. Sun Capital affiliates have invested in and managed over 215 companies worldwide, with a combined sales of over GBP19 billion (USD37 billion) since 1995.