Caterpillar may not be considering that many other options for Cat Logistics
March 24, 2011 - SCMR Editorial
While no announcement has yet been made, some industry analysts feel Caterpillar, Inc. is ready to sell its logistics arm.
“Caterpillar Logistics is up for sale,” Armstrong & Associates Chairman Richard Armstrong told SCMR. “It looks like the bid process will be run by BOA-Merrill Lynch & Robert Baird. We are checking.”
Armstrong also noted that Cat Logistics has $2.3 billion in revenue; 12,000 employees and more than 60 contracts mostly related to automotive, industrial and hi-tech accounts.
As reported in LM (SCMR’s sister publication) yesterday, Caterpillar announced it had begun examining a range of strategic options for its third party logistics business, which is part of its wholly owned subsidiary, Caterpillar Logistics Services, Inc. (Cat Logistics). The company believes the third party logistics business is a unique and attractive asset that has excellent growth potential.
“Over the last 24 years, the company has leveraged its traditional competitive advantage in the Caterpillar parts distribution business to create a global leader in third party logistics, with dedicated employees, unique and attractive assets and excellent growth potential,” said Caterpillar group president Stu Levenick.
Options under consideration include a potential sale of the third party business or structuring it as an independent business within Cat Logistics.
“The third party logistics business has been a high performing operation within Caterpillar, serving more than 50 customers worldwide in a number of different?industries,” said Steve Larson, Vice President of Caterpillar Inc. and Chairman and President of Cat Logistics. “Given Caterpillar’s increased focus on the significant growth opportunities in its core businesses, the company has decided to consider its options for the future of this business. As we work through these alternatives, we will continue to be sharply focused on delivering value for our customers,” Larson added.
Caterpillar manufacturing logistics and transportation operations and Caterpillar brand parts distribution are not part of the third party business and are not part of this strategic review. Those operations will continue as core businesses within Cat Logistics.
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