KUALA LUMPUR: Sime Darby Bhd's subsidiary is buying a group of companies that operate the South Australian Caterpillar dealership for AUD500.0 million (RM1.494 billion).
The purchase price is on a cash-free and debt-free basis subject to customary adjustments for working capital, capital expenditure and stocktake.
According to its filing with Bursa Securities, Sime Darby Industrial Machinery Australasia Pty Ltd has signed a share sale agreement to takeover Kuxton Pty Limited and acquire a 98.9 per cent interest in Kagera Pty Limited.
Kagera is the holding company of a group of companies that operate Cavpower, Cavpower is a Caterpillar Inc. ("CAT") dealership based in South Australia.
Cavpower, headquartered in Adelaide, South Australia, employs more than 450 people through a network of nine branches across South Australia selling Cat®equipment, parts, service and technology solutions primarily catering to the mining, construction, and energy and transportation industries.
Sime Darby Industrial will fund the acquisition through external borrowings and internal funds.
The acquisition of Cavpower represents an opportunity for geographical expansion of the Industrial division to enter the South Australian dealership market through an established, sizeable and reputable provider with an entrenched platform for future growth.
The acquisition diversifies Sime Darby's reach from coal markets to gain exposure to large deposits of critical materials (copper, lithium and cobalt) in South Australia.
Cavpower, achieved a profit after tax and minority interests of AUD23.1 million (RM69.1 million) in the FYE 30 June 2022, on the back of a revenue including Cavpower's equity share of revenue in its joint venture interests of AUD364.5 million (RM1.0897 billion) and supported by net assets as at June 30, 2022 of AUD244.1 million (RM729.7 million).
Sime Darby in its filing said Cavpower is expected to continue to grow its earnings driven by commodity tailwind exposure, current mining pipeline; South Australia mining region expectations as a global leader for critical mineral mining, and utilisation of surplus capacity resulting in less capital expenditure required in the existing business.