On May 20, Caterpillar Inc. received U.S. Justice Dept. clearance to press ahead with its $8.6-billion buyout of Oak Creek, Wis.-based Bucyrus International Inc. The deal, announced in November, is set to close in mid-2011. Caterpillar won’t issue $2 billion in equity to underwrite the purchase, as once planned. Rather, the Peoria, Ill., construction equipment maker is paying for Bucyrus through a combination of cash on hand and debt in the form of a $4.5-billion, five-part bond sale. The purchase is Caterpillar’s largest acquisition to date.
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.