Caterpillar buying locomotive maker EMD for $820 million cash from private equity firms

Caterpillar unit buys locomotive maker for $820M

PEORIA, Ill. — Heavy equipment maker Caterpillar Inc. says its railroad service unit will spend $820 million cash to acquire locomotive maker Electro-Motive Diesel.

Caterpillar says that its Progress Rail Services division has agreed to buy EMD from private equity firms Berkshire Partners and Greenbriar Equity Group.

Caterpillar Vice Chairman Doug Oberhelman says this deal will help his Peoria, Ill.-based company increase its presence in the railroad industry, which has a bright future because it can efficiently move lots of freight.

In 2009, EMD generated $1.8 billion revenue on sales of diesel-electric locomotives.

The deal is expected to close by year-end. EMD will keep its CEO and remain in LaGrange, Ill.

Online:

Caterpillar Inc.: www.cat.com

Progress Rail Services: www.progressrail.com

Electro-Motive Diesel: www.EMDiesels.com

Berkshire Partners LLC: www.berkshirepartners.com

Greenbriar Equity Group LLC: www.greenbriarequity.com