Caterpillar Announces Acquisition of Leading Brazilian Locomotive Component and Transit Car Services Company
MGE Equipamentos & Servicos Ferroviarios Ltda. will become part of Caterpillar's Progress Rail Services Division
PEORIA, Ill., June 24 /PRNewswire-FirstCall/ -- Caterpillar Inc. , has reached an agreement to acquire all of the capital stock of MGE Equipamentos & Servicos Ferroviarios Ltda. (MGE). Based in Diadema and Hortolandia -- in Sao Paulo State, Brazil, MGE is a manufacturer and reconditioner of traction motors, main and auxiliary generators, control equipment and auxiliary components for locomotives and transit cars. In addition, MGE maintains, modernizes and rebuilds transit cars and locomotives. Customers include various transit authorities and railroads in South America. MGE is a market leader in the Brazilian market for the products and services it provides and is recognized for its quality and customer satisfaction. MGE will become part of Caterpillar's Progress Rail Services Division (Progress Rail).
"The acquisition of MGE represents an important step in Progress Rail's international growth strategy," said Billy Ainsworth, Caterpillar vice president with responsibility for Progress Rail. "We welcome the management and employees of MGE to Progress Rail and Team Caterpillar and look forward to serving MGE's existing customers as well as providing products and services to the rapidly growing rail and transit industry in South America."
Progress Rail is one of the largest integrated and diversified suppliers of railroad and transit system products and services in North America. These products and services include various types of rolling stock and track infrastructure. Headquartered in Albertville, Alabama, Progress Rail operates in more than 110 locations with 4,625 employees in the United States, Canada and Mexico. The acquisition of MGE is the first business expansion for Progress Rail outside of North America.
"The continued growth of our service businesses is an important part of Caterpillar's Vision 2020 strategy, and the acquisition of MGE is a logical first step as Progress Rail expands its proven and successful business model outside of the North American market," said Steve Wunning, Caterpillar Group President.
Progress Rail and MGE see important synergies leveraging Progress Rail's extensive range of products and services, MGE's relationships with the Brazilian railroads and transit systems, and Caterpillar's relationships with Brazilian mining and construction industries. Caterpillar has had a presence in Brazil since 1954 and continues to invest in its Brazilian operations. Caterpillar's primary administrative and operational activities are located in the city of Piracicaba, State of Sao Paulo. In addition, Caterpillar and its independent dealer network in Brazil service and support an extensive range of construction and mining equipment operating in Brazil's large and growing mining and construction industries.
Ronaldo H. Moriyama and Carlos A.A. Roso, who were principal MGE shareholders, will continue to serve as co-managing directors reporting to Billy Ainsworth as part of Progress Rail.
For more than 80 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2007 sales and revenues of $44.958 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services. More information is available at http://www.cat.com/.
Hm how positive do you think this might be?
Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 17.2 21.4 22.9 24.5
DPS 5.9 11.5 13.4 14.1
thx
MS
I bought 34,400 CXG in early 2008 at $1.16, because the numbers looked good, and another 17,000 on Monday, 1/9/2008, for the same reason. Results for 08 were published on Friday, and EPS was 21 cents. The price at COB today (Tuesday, 2/9/08) was $1.25, so I am ahead, but I think the SP has a long upward path yet, so I am not selling. I have too many to consider buying more - you know the logic - spread the risk.
The nexus between CXG and Caterpillar's Progress Rail is intereting. Caterpillar recently acquired a Brazillian company that has some of the hallmarks of CXG, so that could be a play repeated in Australia in years to come. See www.cat.com/cda/components/fullArticle?m=38622&x=7&id=912675 for the blurb.
Choose an apt PER for CXG, and multiply it by 21 cents, and you will get your target price for CXG. I have selected a PER of 10, whereas it is now has a PER of 6.
I bought 34,400 CXG in early 2008 at $1.16, because the numbers looked good, and another 17,000 on Monday, 1/9/2008, for the same reason. Results for 08 were published on Friday, and EPS was 21 cents. The price at COB today (Tuesday, 2/9/08) was $1.25, so I am ahead, but I think the SP has a long upward path yet, so I am not selling. I have too many to consider buying more - you know the logic - spread the risk.
The nexus between CXG and Caterpillar's Progress Rail is intereting. Caterpillar recently acquired a Brazillian company that has some of the hallmarks of CXG, so that could be a play repeated in Australia in years to come. See www.cat.com/cda/components/fullArticle?m=38622&x=7&id=912675 for the blurb.
Choose an apt PER for CXG, and multiply it by 21 cents, and you will get your target price for CXG. I have selected a PER of 10, whereas it is now has a PER of 6.
I hold as well and hope that their financing issued get resolved soon.
In last years annual report they revealed that had quite a bit of debt but believed that they could pay it reasonably quickly into this financial year.
Coote came up with a plan to sell 12 of their locomotives to a private unlisted company...and then lease them back.
The private company has trouble raising $80 million from the banks...I believe that this has not yet been resolved.Hence the uncertainty and the low share price.
I optimistically wait for a positive market announcement ...but it drags on
I have bailed out of this stock - someone told me if you cannot understand the business then get out.
The 'Not Fair but Reasonable' quote by the independent expert was enough for me. I kept reading the report but can only could see Elph having Coote over a barrel, with its heavily discounted capital raising deal.
This all originated with Elph helping out with the Cootes and Greentrains deal. All a bit too messy (Greentrains being partly owned by Cootes parents, must have made interesting dinner table discussions).
Arghh go read the report. Hope they get it all sorted.
Dont take my advice on this stock - when I say I cannot understand the business - that applies to most stock!
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