Downer EDI sells freight equipment arm to Progress Rail


Caterpillar firm gains contacts, facilities and more from Australian company

Downer EDI sells freight equipment arm to Progress Rail
Downer is out of freight rail train-making

 

Downer EDI is selling out of rail freight equipment manufacturing for $109 million.

The Australian company is divesting the business to Caterpillar subsidiary Progress Rail.

The sale includes: customer contracts; facilities located at Malaga, Port Augusta and Clyde as well as other licensed facilities; associated assets and liabilities.

Around 360 people currently employed by Downer are expected to transfer to Progress Rail as part of the transaction.

Downer and Progress Rail have worked together for almost seven decades supplying and maintaining locomotives in Australia and the two companies will maintain an ongoing relationship in Australia, Downer states.

The sale is to be completed in January and Downer will now focus on its public transport business.

As a result of the transaction, Downer will book a non-cash write down of $40 million relating to Freight Rail goodwill and legacy assets.

"This acquisition allows Progress Rail to directly serve rail customers in Australia with best-in-class products and services," Caterpillar senior vice president and Progress Rail president and CEO Billy Ainsworth.

"It also reinforces Progress Rail’s commitment to the rail industry."

 

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