Nc Machinery, A Caterpillar Franchise, Is For Sale

NC Machinery, which employs 800 people in Washington and is one of the largest Caterpillar dealers in the United States, is for sale.

More than 90 percent of NC's business comes from sales of equipment made by Caterpillar, the world's largest manufacturer of earthmoving equipment.

"We're in the process of putting together the prospectus and then we will be interviewing prospective candidates," said Bill Rambo, Caterpillar's Seattle district manager. The prospectus should go out to potential buyers in December or January. A sale is not expected to close for six months or more.

Rambo said NC's franchise territory extends west from the Columbia River to the Pacific (except for a chunk of Southeastern Washington), and includes Alaska. The machinery company also has been providing spare parts and service for Caterpillar equipment sold in the Russian province of Magadan.

Rambo said the franchise was "one of the top five or 10 in the U.S." in annual sales. Caterpillar has 65 franchisees in the U.S., he said.

The Tukwila-based equipment dealer probably will be sold for more than $100 million, according to NC and industry sources. The privately held company, owned by the Seattle-based Skinner Corp., has annual sales of over $200 million, said John Clearman, company president.

Besides the Caterpillar franchise, the sale likely would include NC's plant and equipment, Clearman said. The company owns three building complexes in Tukwila.

It also owns sales and service outlets in Chehalis, Mount Vernon, Yakima, Anchorage, Fairbanks and Juneau and leases buildings in seven locations in Washington and Alaska.

Caterpillar often sells to its franchise owners who want to increase their territory, industry sources say. Potential buyers include The Halton Co. of Portland, Ore., and Pacific Machinery of Honolulu. Finning Tractor of Vancouver, B.C., also has been mentioned.

Caterpillar has been hit hard by the slowdown in the construction industry. "Caterpillar's having trouble making money these days," said Steven Colbert of Prudential Securities in San Francisco. Illinois-based Caterpillar had annual sales last year of $9.83 billion in its equipment division.