Canadian Cat Dealers Combine As Toromont Buys Hewitt

A pair of Canadian Caterpillar dealers are becoming one with the announcement that Toromont Industries Ltd., Toronto, Ontario has entered into a definitive agreement to acquire the businesses and net operating assets of the Hewitt Group for $917.7 million (Canadian) cash plus the issuance of 2.25 million Toromont shares (nominally $100 million based on 10 day average share price as at signing) for a total consideration of $1.0177 billion (Canadian).  The transaction is expected to close by mid-October, 2017, subject to the timing of certain regulatory consents, including TSX approval, and customary closing conditions.

Hewitt Equipment Ltd. is the authorized Caterpillar dealer for the province of Québec, Western Labrador and the Maritimes, as well as the Caterpillar lift truck dealer for most of Ontario. Hewitt is also the MaK dealer for Québec, the Maritimes and the Eastern seaboard of the United States, from Maine to Virginia.

Toromont Industries Ltd. operates through two business segments: the Equipment Group and CIMCO. The Equipment Group is the Caterpillar dealer with a network of 34 branches in Ontario, Manitoba, Newfoundland and selected regions of Labrador and Nunavut.  The group also has the Metso and Masaba crushing and screening equipment lines. 

Toromonth’s Battlefield Equipment Rentals has 40 stores in Ontario, Manitoba, Newfoundland and Labrador.  The company’s Toromont Energy group develops distributed generation and combined heat and power projects of less than 50 MW.

CIMCO designs, fabricates and installs industrial and recreational refrigeration systems.

For more information about Toromont Industries Ltd.  

Headquartered in Pointe-Claire, Québec, Hewitt sells, rents and services the full line of Caterpillar and other products through its six operating business entities: Hewitt Equipment, Atlantic Tractors, Location Hewitt/Hewitt Rentals, Hewitt Material Handling, Montréal Hydraulique and SITECH QM. Founded in 1952, Hewitt has 45 branches across Eastern Canada and employs more than 2000 people. Hewitt is privately held.

In the year ended December 28, 2016, Hewitt generated revenues of over $1.0 billion, operating profit of $66.4 million and net earnings of $46.6 million.

Upon close of the acquisition, Toromont’s Caterpillar dealership will operate 120 branches in Nunavut, Manitoba, Ontario, Québec, New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland & Labrador. Toromont expects to maintain existing facilities and under its decentralized business model, regional leadership will continue to run their businesses.

“We are very proud to have the Hewitt Group join us and are privileged to be taking on the stewardship of this excellent business and building on the family legacy,” said Scott J. Medhurst, Toromont president and CEO.  “We intend to add to its position of strength by investing in people, facilities, technology and rental fleets. Our position will allow us to better capitalize on organic growth opportunities given the recovery of the mining sector that we are currently experiencing and the promise of significant infrastructure investment. We look forward to working with key members of Hewitt’s leadership team.

“The acquisition delivers a substantial growth opportunity, allowing us to expand into the significant Québec, Western Labrador and Maritime markets, and strengthens our expertise in the mining, construction, power systems and forestry sectors,” Medhurst said.