Cat buys alternative engine maker, posts stellar 3rd quarter results
| October 22, 2010 |
Following yesterday’s release of stellar third-quarter sales, Caterpillar says it will buy MWM Holding GmBH from 3i. Headquartered in Mannheim, Germany, MWM supplies alternative engines. With this $810 million cash deal, Cat says it will significantly expand options for sustainable power generation solutions.
MWM has a “highly efficient range of engines, combined heat and power and trigeneration solutions capable of operating on a wide range of gaseous fuels including natural gas, biogas, mine gas and industrial waste gas,” says Caterpillar CEO Doug Oberhelman, who further states the buy is a natural complement to the firm’s existing diesel and gas power generation business. The company will become part of Cat’s Electric Power Division.
In it’s third quarter earnings release yesterday, Cat reported a profit for the quarter of $792 million, 96 percent higher than third quarter 2009. Sales and revenues were up 53 percent from the same period last year. Cat says its 2010 outlook for sales and revenues is in a range of $41 to $42 billion, an increase of 28 percent from 2009, and 2010 is “shaping up to be one of the most significant year-over-year increases in sales and revenues in our history.”
The company now tags its preliminary outlook for 2011 to approach $50 billion in sales and revenues, lead by developing countries. Increases in North America, however will be modest, says Oberhelman. “Customers are buying some machines to stop the aging of their fleets, and dealers are restocking rental fleets, although rental fleet ages still remain high,” he commented during an analysts’ call on Thursday.
MWM stands for Motoren-Werke Mannheim.