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June 3, 2010 12:09 PM

Mayer Brown, Ropes Advise on Caterpillar's Acquisition of Locomotive Manufacturer

Posted by Tom Huddleston Jr.

Caterpillar Inc., the world’s largest construction equipment company, reached a deal Tuesday to acquire locomotive manufacturer Electro-Motive Diesel, Inc., for $820 million in cash. EMD, which saw revenues of $1.8 billion in 2009, will become part of Peoria, Ill.-based Caterpillar’s Progress Rail Services unit. The deal should be finalized by the end of the year, Caterpillar said in a statement.

Caterpillar, which was advised by Mayer Brown, will acquire LaGrange, Ill.-based EMD from an investor group led by Berkshire Partners LLC and Greenbriar Equity Group LLC. Lawyers from Ropes & Gray served as counsel for the target companies.

Mayer Brown corporate and securities partners Paul Crimmins and John Sagan led a team of nearly 20 lawyers from the firm’s Chicago office that included employment and benefits partners Debra Hoffman and Marcia Goodman, tax transactions partner James Barry, environmental litigation partner Thomas Dimond, bankruptcy, workout and reorganization partner Stuart Rozen, real estate partner Patrick McNerney, and litigation partner Michael Gill.

The firm became Caterpillar’s appointed M&A counsel in early 2004, but more recently began working with Progress Rail, which often relies on its in-house team.

“We started working with them last year, and the relationship is going very well,” Crimmins said.

The acquisition of EMD, which designs, manufactures and services diesel-electric locomotives, will allow Caterpillar to further expand rail operations. Since 2006, the company has spent about $2 billion in that arena, according to the statement. In that year, Caterpillar announced the Mayer Brown-advised deal that netted Progress Rail as a subsidiary.

Private equity partner James Lidbury led a Ropes & Gray team of nearly a dozen lawyers on the EMD deal, including private equity partner Jonathan Grandon from the firm’s Chicago office, as well as tax partner Erik Corwin and antitrust partner Mit Spears from the Washington, D.C., office. (Also involved was Thomas Rissman of McLachlan, Rissman & Doll, who also serves as EMD general counsel.)

Ropes & Gray has a long-standing relationship with Berkshire Partners LLC, Lidbury said, and the firm was involved in that company’s 2005 acquisition, with Greenbriar Equity, of EMD from General Motors Corp. and its affiliates. 

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