Caterpillar Inc. and A.S.V., Inc. have completed a Securities Purchase Agreement in which Caterpillar has purchased 500,000 newly issued shares of ASV common stock at $18 per share for a total of $9 million. Caterpillar has increased its ownership in ASV to about 15 percent.
The two companies also announced the signing of an alliance agreement in which they plan to jointly develop and manufacture a revolutionary new product line of Caterpillar rubber track skid steer loaders called Multi-Terrain Loaders. The product line, which is expected to include five new models, will feature Caterpillar’s patented skid steer loader technology and ASV’s patent- pending Maximum Traction Support System rubber track undercarriage. The machines will complement existing models in both ASV’s and Caterpillar’s current product lines. They will be sold through the Caterpillar dealer network.
"This is a significant moment in the history of our company and our technology," said ASV President Gary Lemke. "The combination of proven technologies from each of our companies will result in a revolutionary new line of products that will provide greater value to customers in the construction, landscaping, industrial and agricultural industries worldwide."
Under the terms of this alliance agreement, ASV will use a portion of the stock sale proceeds to fund development of the new models. The first two models are expected to be introduced to a limited number of North American Caterpillar dealers in the second quarter of 2001.
The new machines will be assembled in Sanford, NC, at Caterpillar’s skid
steer loader facility. The undercarriages will be manufactured at ASV
headquarters in Grand Rapids, MN.
In addition, Caterpillar announced that it will introduce larger skid steer loader models next year featuring greater lift, reach and operating capacity. "When the model line expansion is complete, Caterpillar will offer customers a choice of 15 highly differentiated models of skid steer loaders that will firmly establish Caterpillar as the technology leader in this rapidly growing business," said Donald M. Ings, Caterpillar vice president with responsibility for the company’s Building Construction Products Division.
These new agreements are in addition to previous agreements entered into by the two companies. Those agreements provided ASV access to the Cat dealer network to distribute its Posi-Track products. Under these agreements, Caterpillar purchased one million shares of ASV common stock and a warrant to acquire approximately 10 million shares of ASV’s common stock. The shares of common stock owned by Caterpillar, together with the warrant shares, if exercised completely, would provide Caterpillar a majority ownership in ASV.
