Finning completes US$300 million private placement
Finning International Inc. (TSX:FTT) announced April 3 that it has completed a US$300 million private placement in exchange for senior unsecured notes that are due between 2022 and 2027.
Finning will use the proceeds to fund its anticipated purchase, from Caterpillar Inc. (NYSE:CAT), of distribution and support business carried out by Bucyrus International Inc.
Finning, which is the world’s largest distributor of Caterpillar-branded heavy equipment, previously announced that it would pay Caterpillar US$465 million for its Bucyrus’ distribution business in Finning territories across Western Canada, South America, the U.K. and Ireland.
Finning ranked as B.C.’s third largest public company, after Telus Corp. (TSX:T) and Teck Resources Ltd. (TSX:TCK) in Business in Vancouver’s 2011 Book of Lists. It generated $5.9 billion in sales in 2011, a 29% increase over 2010.
After Finning’s announcement, Standard and Poor’s Ratings Services said that its ratings and outlook for Finning were unaffected by the news.
“In our view,” the Standard and Poor’s statement read, “the Bucyrus distribution business will strengthen Finning’s business risk profile because it will provide the company with a new growth opportunity as well as strengthen its market position within the mining sector.”
Source: BIV newsletter
