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Caterpillar, JLG Announce Global Telehandler Alliance

Posted on October 27, 2005

Caterpillar Inc. and JLG Industries Inc. have signed definitive agreements to enter into a global alliance to produce a line of Caterpillar branded telehandlers. The deal is expected to close prior to the end of the year. Under the terms of the 20-year strategic alliance agreement, JLG will provide a line of Cat-branded telehandler products exclusively to Caterpillar dealers. JLG said it will support the North American and Latin American markets from its McConnellsburg, Pa., facility and the markets in Europe and the rest of the world from its Maasmechelen, Belgium facility.

Concurrently, JLG said it has signed definitive agreements with Caterpillar to acquire certain equipment, tooling, and intellectual property of its telehandler group. The purchase price for Caterpillar's telehandler assets is $51.4 million, with $46.4 million paid at closing and $5 million upon transition of Cat branded telehandler sales to JLG, currently anticipated to be approximately 12 months from now. In addition, JLG expects to invest an additional $30 million during the transition period for the development of the North American Caterpillar product line and for capacity improvements in both Belgium and Pennsylvania to accommodate the additional volume.

Caterpillar’s telehandler products are currently produced at its Building Construction Products (BCP) plant in Leicester, England, along with four other machine product groups. Caterpillar will retain responsibility for the B-series telehandlers and earlier models, manufactured and sold by Caterpillar prior to the transition of production to JLG, including warranty and service.

As telehandler production is shifted from Caterpillar’s Leicester operations to the JLG facilities, BCP’s European operations will undergo a strategic restructuring to better position the manufacturing of its four remaining product groups consisting of backhoe loaders, small wheel loaders, compact wheel loaders and mini hydraulic excavators, Cat said. Caterpillar will continue production of these existing machines at Leicester.

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