Caterpillar Inc. has purchased forestry equipment dealer Pioneer Machinery, Inc. Caterpillar will also purchase an affiliated used equipment company, Ironmart Inc., and finance company, Federal Financial Services Inc. After the acquisition, current Caterpillar dealers in the same six southeastern states will consolidate their forestry products operations and acquire a substantial ownership position in the new

company.

"Our goal is to become the primary supplier for forestry products and attachments," said John E. Pfeffer, Caterpillar vice president with responsibility for the North American Commercial Division. "By combining their forestry product opportunities into one regional dealership, our dealers will be able to provide customers with better coverage and industry- specific services as they become the one-stop source for all the equipment needed by those involved in felling, processing, extraction, and handling operations." Pfeffer said the company has received wide support for the move from Cat dealers.

The move represents a significant re-engineering of Caterpillar’s forestry products distribution. "This particular change," said Pfeffer, "is designed to better serve our forestry customers." Pioneer brings several core capabilities to the acquisition, including a complete forestry product line of industry leading manufacturers and dedicated forestry sales and service professionals. Caterpillar adds a well-developed territory covering the six states, a seasoned support system, a financial base that will give the new dealer additional strength and a growing forestry product line. Caterpillar has more than doubled its forestry product offering in just the last five years.

Caterpillar Group President Gerald L. Shaheen further commented, "The acquisition of a distribution company is a different type of acquisition for Caterpillar, but it fits well with our strategy to become more clearly focused on our customers and their industry segments and to improve dealer account attractiveness. The acquisition of Pioneer will help us better serve our forestry customers and provides the necessary ’critical mass’ to provide dedicated forestry coverage with an acceptable profit level."

In effect, Pioneer becomes a new Cat dealer offering only forestry products and services to customers throughout the six southeastern states. Pioneer will be owned by Caterpillar and the Cat dealers whose service territories cover the same area. These dealers will no longer offer forestry products to tree harvesting customers, but will benefit financially from their interest in Pioneer.

Pioneer currently has 29 stores and approximately 450 employees. The current owner and management team will continue to run the company.

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