Canadian tunnel boring machine manufacturer Lovat was bought last month by Caterpillar, which paves the way for the international plant group to expand into the competitive tunnel boring machine sector.
Neither the cost of the acquisition nor financial terms of the deal were disclosed. Contact leading to the deal started some months ago and entered ‘a more detailed and serious phase within the last few months’ prior to the announcement, at the end of March. The deal has been closed.
Lovat will become part of Caterpillar’s Global Mining Division, but the brand name is to remain the same ‘for the foreseeable future’.
Head of Lovat, Rick Lovat, will join the division and has responsibility for driving Caterpillar’s ambitions in the tunnelling sector. The parties said Caterpillar was pleased to have him and his team in place to provide continued guidance and leadership for the new business for the group.
While giving the plant group an in-road to the tunnelling sector, the acquisition affords the Lovat TBM business the benefits of Caterpillar’s purchasing power, R&D initiatives and funds, global footprint and experience in large-scale manufacturing processes. They added that the combination ‘should result in positive growth’ for the business, particularly due to the portfolio fit and the ‘long-term demand for major infrastructure projects around the world,’ though expectations were not quantified.
However, they declined to outline the strategy to develop the TBM business, except that the primary TBM manufacturing facility will remain at Lovat’s site in Toronto, continued employment has been offered to all Lovat employees and no job losses are anticipated as a consequence of the acquisition. Caterpillar HR staff have met with Lovat workers to begin the transition process.
The parties told T&TI: ‘From a business and operations standpoint, we are also working to determine best practices from Lovat and Caterpillar in order to find quick wins that will benefit this business and our TBM customers.’
Caterpillar intends to leverage its global business with continued investment in the Lovat product line and in the tunnel boring business, they said. But, with respect to possible other purchases, they commented: ‘Caterpillar is focused on profitable growth, but is unable to speculate on future acquisition plans.’
