The sale was completed today and the consideration comprises cash of £90.2 million, an interest bearing 5-year loan note receivable of £20 million and a 5% equity warrant subject to certain conditions being met.
Finning will use the proceeds primarily to reduce debt.
"After a comprehensive review, we have determined that for strategic and financial reasons, it is in our shareholders' best interest to divest Hewden," said Mike Waites, President and Chief Executive Officer of Finning. "While we believe that Hewden's broad product offering combined with our recent restructuring and national accounts focus will serve it well in the future, owning a large, short-term rental business operating separately from our UK dealership does not align with our strategic objectives. Finning remains fully committed to the UK Caterpillar dealership and its employees who are strongly positioned to serve the construction, mining and power systems markets."
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"Going forward, Finning's UK dealership will continue to work closely with our plant hire customers to place Caterpillar equipment into the UK equipment rental market," added Andy Fraser, Managing Director of Finning UK Group. "Our market approach is to provide total solutions with extraordinary service and Caterpillar world class products. We are confident we can demonstrate the value of Finning to Hewden's new owners and maintain a productive commercial relationship with Hewden."
Hewden covers 63 locations in the U.K. and has 1,300 employees. The existing Hewden commercial centre in Manchester is proposed to be the new head office for Hewden. Finning has agreed to provide transitional services to Hewden.
(CD/GK)
