Bobcat for sale (the company)

[jmfox]

COMPACT EQUIPMENT Cover Story Issue: June 2007

An Uncertain Future for Bobcat

Ingersoll Rand Considers Big Changes for Its Construction Related Businesses

The BAUMA rumor mill generated a deafening buzz early in the show last April — that Bobcat Co. had been sold. The report wasn’t true, at least not yet. A few weeks later, Ingersoll Rand announced it was exploring “strategic alternatives” for its Bobcat and “construction-related businesses,” including its Utility Equipment and Attachments businesses.

Ingersoll Rand has been an extremely busy company over the last 15 years. Ingersoll Rand purchased Clark Equipment Co, in 1995; Clark Equipment Co. was the holding company for Bobcat as well as Club Car. In 2001, the company expanded into the compact backhoe loader realm, acquiring stock of Superstav, spol. s.r.o., a manufacturer of compact tractor loader backhoes based in Dobríš, Czech Republic. Over the last few years, the company became interested in working with companies that made attachments. Ingersoll Rand announced it had acquired U.S. Distribution rights for Tramac branded hydraulic breakers in June 2005. In the fourth quarter of 2006, Ingersoll Rand acquired Geith International, an Irish attachment manufacturer in the construction, excavation, demolition and scrap business.

“Our Bobcat, Utility Equipment and Attachments businesses represent world-class operations with exceptional people, products and brands; however, these businesses no longer fit Ingersoll Rand’s long-term strategy,” explained Herbert L. Henkel, chairman, president and CEO. “The eventual outcome of our process to explore strategic alternatives for these businesses will be the strategic repositioning of Ingersoll Rand away from the capital-intense, heavy-machinery profile of the company’s past and toward a true diversified industrial company with powerful growth platforms consisting of climate control, industrial and security businesses. These businesses are well positioned to deliver consistent growth throughout the business cycle.”

In other BAUMA news, Bobcat Europe, a business unit of the Ingersoll Rand Compact Vehicle Technologies Sector in the European-Served Area (ESA), and Wacker Construction Equipment AG, Germany, announced that their long-standing strategic partnership in Germany, Austria and Switzerland will cease at the end of 2007. Background to this decision is the desire of both partners to focus on their future strategy, which can be best done outside of the current partnership arrangements. In this context, both companies will continue their constructive partnership throughout the remainder of 2007.

 

[jmfox]

Here is another article from the Wall Street Journal:

Ingersoll-Rand Considers Sale
Of Construction-Related Units
By JOSEE ROSE
May 15, 2007 9:43 a.m.

Ingersoll-Rand Co. said it is exploring strategic alternatives for its Bobcat and construction-related businesses, including the manufacture of utility equipment and attachments.

The company, which is based in Bermuda, said the businesses "no longer fit" its long-term strategies and their possible fates include an outright sale or a spinoff to shareholders. The review should be completed in the second half of the year.

Ingersoll-Rand, which makes products for a wide range of industries, including transportation, manufacturing, food retailing, construction and agriculture, said the businesses up for sale had combined revenue of $2.6 billion last year. Ingersoll-Rand posted 2006 revenue of $11.41 billion.

In April, Ingersoll-Rand said first-quarter earnings fell 14%, due to sluggish domestic markets, higher commodity costs, and higher selling and administrative costs. During its fourth-quarter conference call, Chief Executive Herbert L. Henkel said its Bobcat brand was expected to post double-digit year-over-year revenue declines.

The company's latest move comes as housing starts continue to fall amid a weak construction market. The National Associated of Realtors said a week ago that new home sales this year are likely to fall 17.8% to 864,000, compared with its prior forecast of a 14.2% drop.

The company also said its expanded its share-repurchase program to $4 billion from $2 billion. About $330 million shares were repurchased to date. The timing of the repurchases will depend on the disposition of Bobcat, utility equipment and attachment businesses, as well as other uses of proceeds in conjunction with the acquisition program.

In February, Ingersoll-Rand sold its road development unit to Swedish truckmaker AB Volvo for $1.3 billion.

Write to Josee Rose at josee.rose@dowjones.com

 

[radman1]

This info seems a little disturbing as to the future of Ingersoll Rand in the construction business. Lots of competition in this area by multiple companies. The downturn in the construction business has been going on for about 2 years. I suspect it is being felt by all companies. Tough to find buyer in a downturn cycle.
I didn't realize IR had so many other enterprises than just construction.

 

[jmfox]

IR's focus is now "climate control, industrial and security businesses?"

jmf

 

[theoshin]

very interesting. may not be good for r+d budgets at bobcat (future tc improvements). they do make a good vibratory roller!

i dont think jd would want anything to do with bobcat - too much overlap.

 

[jmfox]

I'm sure Terex, Deere, Cat, Kubota are all considering it, but I hope the shareholders prevail.

jmf

 

[mjncad]

COMPACT EQUIPMENT Cover Story Issue: June 2007

An Uncertain Future for Bobcat

Ingersoll Rand Considers Big Changes for Its Construction Related Businesses

The BAUMA rumor mill generated a deafening buzz early in the show last April — that Bobcat Co. had been sold. The report wasn’t true, at least not yet. A few weeks later, Ingersoll Rand announced it was exploring “strategic alternatives” for its Bobcat and “construction-related businesses,” including its Utility Equipment and Attachments businesses.

“Our Bobcat, Utility Equipment and Attachments businesses represent world-class operations with exceptional people, products and brands; however, these businesses no longer fit Ingersoll Rand’s long-term strategy,” explained Herbert L. Henkel, chairman, president and CEO. “The eventual outcome of our process to explore strategic alternatives for these businesses will be the strategic repositioning of Ingersoll Rand away from the capital-intense, heavy-machinery profile of the company’s past and toward a true diversified industrial company with powerful growth platforms consisting of climate control, industrial and security businesses. These businesses are well positioned to deliver consistent growth throughout the business cycle.”

Mr. Henkel's "Bizspeak" nauseates me and is just another reminder of why I'm glad to be out of the corporate cube farm rat race. After numerous buy outs, re-organizations, strategic initiatives, total quality management, etc ad nauseum at my first employer (heavy industrial plant engineering & construction company Stearns-Roger, long defunct); I can sympathize with the Bobcat employees whose morale is probably in the toilet wondering what will happen to them next. My guess for what its worth is that another manufacturer of similar equipment will buy the assets and intellectual property of Bobcat, keep the brand name going for a while, and then let it slowly fade away. This is what happened to Compaq after HP under Carly Fiorina (don't get me started on what I think of her) engineered that buyout.

So what's next? Will IR give up its air tools business? For all I know they may have and are just importing IR labeled stuff from some third world tool and toothpaste manufacturer.

 

[jmfox]

Although delivery expectations have been moved ahead to 2008, I know that Bobcat is actively pursuing the new Toolcat with 3 point hitch. They have hired an outside engineering company for field testing and are touring the country with a promo/demo to create excitement. Despite IR's change in direction, Bobcat is not losing interest. Their formula may need tweaking, but they have some specialized products that assures their future. One thing companies need to capitalize, is the savvy of their customer base. E.g., it would be to their benefit to place test products with articulate end users who have invested their money and attention in Bobcat's development. Corporate concerns regarding control, secrecy and confidentiality, separates them from what customers want and need. How could they go wrong if they gave some test machines to individuals on this forum who believe in Bobcat's machines, paid for the privilege of owning one and spend their time discussing the attributes of Bobcat. The value of engineering opinions would be more pertinent (not to mention helpful) if they explained why radman1's TC gets hung up mowing his land road, and why trlbrkr can't drive across his yard with a load of soil.

jmf

 

[kude]

You know, having a big corporate conglomerate that is driven by the Wall Street profit mindedness sell off Bobcat, may not be a bad thing. The recent trend is for for private capital companies to purchase divisions like this and keep them private. There might be a capital group out there that sees the value in Bobcat, and is not afraid to invest in it. On the other hand, another brand accumulator might swallow it up.

Let's just hope that for the sake of competition, Bobcat lands on its feet.

 

[radman1]

My dealer predicts that the Bobcat sell off deal will be complete by the end of this month. Approximately, 8 companies in the running, including Kubota, Komatsu, Scat Trac, Terex... Asking price is over 3 billion. Bobcat is number one in sales for skid steers in the world. Currently Bobcat has backorders for 4000-5000 machines. Company is currently very profitable according to him and the sell off is not due to poor company health.
My personal choice would be Kubota. With the exception of the excavator line, all the current bobcat lines would be new for kubota. He says kubota is number 1 in excavator sales in the world and bobcat is number 2 in excavator sales. The excavator overlap could be a problem for kubota. Maybe the escavator lines could merge with time. Also bobcat currently uses all kubota engines. Who else could buy the engines cheaper than kubota itself! Kubota has the finances to buy it. Kubota already has a credit company which bobcat doesn't. Kubota has the expertise and networks in place to keep bobcat going in the right direction.