Finning International Inc. has announced it has reached an agreement to acquire 100 per cent of 4Refuel Canada and 4Refuel US.
The acquisition is expected to cost about $260 million. In 2018, 4Refuel is expected to generate net revenue of about $110 million. More than 95 per cent of 4Refuel’s profitability is generated in Canada.
4Refuel pioneered mobile on-site refueling and has built a large market presence across Canada, employing about 600 people and serving more than 3,400 customers.
Finning International is the world’s largest Caterpillar equipment dealer. Finning sells, rents and provides parts and service for equipment and engines. Headquartered in Vancouver, the company operates in Western Canada, Chile, Argentina, Bolivia, the United Kingdom and Ireland.
“This transaction is a great example of a Caterpillar complementary bolt-on acquisition that accelerates our customer-centric growth strategy. With this investment, we will provide new and existing customers with additional services to improve productivity and decrease their total cost of equipment ownership,” said Scott Thomson, president and CEO of Finning.
4Refuel refuels customer equipment directly on site, mostly during off hours when equipment is idle. Headquartered in Toronto, 4Refuel provides service to a range of large and small clients in construction, transportation, oil & gas and power generation.
About 50 per cent of 4Refuel’s customers are based in western Canada. By combining forces, Finning will have the opportunity to sell equipment, product support and rent to a potentially new customer base.
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Furthermore, 4Refuel will have the opportunity to sell more fuel services to Finning’s 18,000 plus customers enabled, in large part, by connectivity. Finally, the overlapping geographies and supply chains present opportunities to gain efficiencies, optimize routes and improve customer service.
The transaction will be funded with cash on hand and from existing credit facilities, and is subject to customary regulatory approvals and is expected to close early in 2019. will be funded with cash on hand and from existing credit facilities.