The company said it will honour contractual obligations to customers including after sales support, and would provide parts and service support up to 2016. Its 330 employees are receiving a severance package.
Stu Levenick, Caterpillar group president said: "We continuously evaluate our strategic portfolio to ensure alignment with our long-term strategy and have concluded the tunneling business no longer fits that strategy.
"As a result, we have elected to exit the business. We know this is difficult news for our employees and their families. We acquired a great team when we bought this company, and while they have demonstrated an ability to build quality products, the future prospects of this business no longer align with our expectations."
