Caterpillar has agreed to purchase mining data and communications company Minetec for approximately $US14 million ($18.07 million) from Codan.
Following a Codan board meeting, the tech-company decided Caterpillar would be more capable of scaling Minetec to its full capabilities, having already integrated the technology into Caterpillar’s Minestar solutions.
Minetec delivers tracking and data as well as software applications to address productivity and safety issues in underground mining.
Codan managing director Donald McGurk said this was the best possible result for Minetec.
“As we evaluated our strategic options, we concluded that the best outcome for Minetec to achieve its potential was to discuss the transfer of the business to Caterpillar, this being seen as a logical progression following the partnership agreement put in place in 2018,” he said.
The agreement in 2018 was a master development and marketing agreement between the two companies, which allowed Caterpillar to enhance its underground positioning prowess.
McGurk said Caterpillar had the international reach and capital to turn Minetec into a much greater force.
“We believe that Caterpillar is the more appropriate owner, as they continue to be the market-leading supplier to the mining industry, with an extensive global dealer network covering 172 dealers across 190 countries,” he said.
“Caterpillar embraced this thinking, leading to today’s announcement. In particular, Caterpillar saw the benefits of an integrated business under their ownership”.
The handover will extend for five years to ensure a smooth transition between the companies.
Codan will provide manufacturing services to Caterpillar, while Caterpillar bolsters its own capabilities to run the Minetec business.
The sale is expected to be complete by the end of July 2021.