3i sells MWM to Caterpillar

22 Oct 2010

Peoria, Ill. / London, U.K. – Caterpillar Inc. (NYSE: CAT) has signed an agreement to acquire MWM Holding GmbH (“MWM” or the “Company”) from 3i and funds managed by 3i. Headquartered in Mannheim, Germany, MWM is a leading global supplier of highly sustainable alternative engines.

With the acquisition of MWM, Caterpillar will significantly expand customer options for sustainable power generation solutions. The total transaction value amounts to €580 million (approximately $810 million) and will be paid in cash.

MWM, which stands for Motoren-Werke Mannheim, can draw on more than 135 years of experience in the development and optimization of combustion engines for natural gas, special gases and diesel.

“MWM is recognized for its leading technology and product strength, particularly for its highly efficient range of engines, combined heat and power and trigeneration solutions capable of operating on a wide range of gaseous fuels including natural gas, biogas, mine gas and industrial waste gas,” said Caterpillar CEO Doug Oberhelman. “This is a natural complement to Caterpillar’s existing diesel and gas power generation business and demonstrates our commitment to continued investment in sustainable products and industries,” Oberhelman added. 

“We are very pleased about the development MWM experienced over the last three years. In close collaboration with the MWM management and its employees, we developed and implemented a broad number of strategic and operational improvement initiatives. We also made significant investments in the Company’s production facilities, research and development platform and distribution network. Today, MWM has a highly skilled and motivated workforce, best-in-class products as well as a very efficient sales organization and production facilities,” said Peter Wirtz, partner and managing director of 3i Germany. “Beyond our accomplished mission of transforming MWM’s positioning, we strongly believe in the long-term success of the Company under Caterpillar’s ownership,” Wirtz continued.

Following the repositioning of MWM over the three years since 3i’s investment in the company, 3i will recognize an internal rate of return in excess of 25 percent and generate a 2.2x return on its investment.  
“We highly appreciate 3i’s support and believe that Caterpillar provides the best prospects for the next step of our development, given its worldwide network which will open up new distribution and growth opportunities to us,” said Peter Grosch, chairman of MWM.

MWM will become part of Caterpillar’s Electric Power Division (EPD), which supplies natural gas and diesel generator sets and integrated power systems involved in the generation, control and supply of electricity. EPD operates in more than 50 locations around the world.

The integration of MWM will result in important synergies leveraging the two companies’ existing product ranges, advanced engine technologies, research and development resources, manufacturing, distribution and customer support capabilities.

“The gas engines industry is a great fit for Caterpillar’s energy and electric power systems business. Together with the two companies’ premium products, technology and global distribution network, our comprehensive offerings will deliver sustainable power system solutions for our global customers,” said Bill Rohner, Caterpillar vice president with responsibility for Electric Power.  The acquisition is expected to close in the coming months, pending final regulatory approvals. 
 
 
About Caterpillar:
For more than 85 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2009 sales and revenues of $32.396 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services.  More information is available at:  http://www.cat.com.

About 3i:
3i is an international investor focused on Private Equity, Infrastructure and Debt Management, investing in Europe, Asia and North America. Our competitive advantage comes from our international network and the strength and breadth of our business relationships. These underpin the value that we deliver to our portfolio, shareholders and fund investors.  More information is available at: http://www.3i.com.

About MWM: 
MWM GmbH is one of the world’s leading providers of highly efficient and sustainable energy generation plants. Based in Mannheim, Germany, the enterprise can look back on more than 135 years of experience in the development and optimization of combustion engines for natural gas, special gases and diesel fuel. Understanding of the value chain, engineering competence and innovative drive make MWM a reliable partner who develops and produces solutions tailored to the individual needs of its customers. With over 1,100 employees across 11 subsidiary companies worldwide, the company has focused on ecologically progressive solutions for producing "renewable energy".  More information is available at: http://www.mwm.net.

For further information please contact:

Kathryn van der Kroft
email. kathryn.vanderkroft@3i.com
tel.  +44 207 975 3021