Komatsu to Buy Joy Global

July 21, 2016

Komatsu will acquire Joy Global in a transaction valued at approximately $3.7 billion, including Joy Global’s outstanding indebtedness.

Under the terms of the agreement, Joy Global stockholders will receive $28.30 per share in cash for each outstanding share of common stock held, representing a 48 percent premium to the volume-weighted average closing price of Joy Global’s common stock for the 90 trading days, and a 41 percent premium to the volume weighted average closing price of Joy Global’s common stock for the 60 trading days prior to July 21, 2016.

Komatsu will operate Joy Global as a separate subsidiary in order to retain the strength of the Joy Global brand names: P&H, Joy, and Montabert. The companies will align the organization and operation for optimal customer support from Joy Global’s headquarters in Milwaukee, Wis.

Komatsu said the two product lines will integrate well, as Komatsu can now offer the underground mining equipment, super large-sized loading equipment, draglines, and drills. Joy Global also manufactures underground mining equipment, another area Komatsu is not in.

JoySmart Solutions leverages the Internet of Things to connect customer products with experts using data and analytics to improve mine performance. Komatsu also engages in the improvement of safety and productivity with its Autonomous Haulage System, mine fleet management systems, and KOMTRAX Plus, which all serve to visualize job site operations. Data obtained from IoT-based mining equipment and systems will be connected and used through the open platform of Komatsu.

“This is a compelling transaction that delivers substantial and certain value to our stockholders as well as expanded options for our customers and employees going forward,” said Ted Doheny, president/CEO of Joy Global. “We believe this is the right partnership to meet the evolving needs of our customers while furthering our ability to lead the mining industry with game-changing technologies and best-in-class products. Joy Global’s Board of Directors, in making its determination, considered the challenging market conditions the company believes are likely to persist. The mining industry continues to face cyclical headwinds from oversupplied commodities and reduced end user demand resulting in cash flow restrictions for most producers, creating an increasingly challenging environment. We are also seeing structural changes in the U.S. and China coal industry.

“Our companies share similar cultures and values,” Doheny continued, “and we expect many Joy Global employees to benefit from exciting career opportunities as part of an even larger, more diversified company. On behalf of the Joy Global Board and management team, we thank our dedicated employees for their continued hard work and commitment to solving mining’s toughest challenges.”

The transaction is expected to close by mid-2017.