Caterpillar invests in electric powertrain maker
Equipmake Holdings PLC announced on Monday that it has secured a £5 million ($5.4 million) investment from Caterpillar Venture Capital Inc., the investment arm of the global heavy machinery manufacturer Caterpillar Inc. The strategic investment, in the form of a senior secured convertible loan, marks the successful conclusion of Equipmake’s strategic review and the end of its formal sale process.
The investment by Caterpillar comes with a development agreement for Equipmake to create electric drivetrain products and solutions tailored for Caterpillar’s diverse applications. This partnership underscores a significant move by Caterpillar to bolster its electrification capabilities in construction and mining equipment, as well as other industrial machinery.
Equipmake, which is based in Norfolk, UK and makes electric buses and powertrains, has been recognized for its contributions to the automotive and specialty vehicle industries. The CEO of Equipmake, Ian Foley, expressed his enthusiasm for the partnership, stating that the investment from a renowned industry leader like Caterpillar is a testament to the quality and innovation of Equipmake’s products and team. He emphasized the potential for new commercial opportunities and advancements in scalability that the collaboration with Caterpillar could bring.
According to the terms of the convertible loan, Caterpillar will provide the £5 million with a four-year term and a 10% annual interest rate, which will be paid upon maturity or included upon conversion. The loan is set to mature on March 31, 2029, with options for Caterpillar to extend the maturity date, demand repayment, or convert the principal and accrued interest into Equipmake equity securities.
The funds from the loan are earmarked for general working capital purposes, within the scope of the Master Development Agreement conditions. The loan is secured on the assets of Equipmake and its subsidiaries, ensuring Caterpillar’s investment is protected.
The announcement also marks the termination of Equipmake’s strategic review and formal sale process, as the board believes the company is now in a strong financial and commercial position. Equipmake is no longer considered to be in an “Offer Period” according to the Takeover Code, and as a result, the obligation for takeover-related disclosures has ceased.
This strategic investment and development agreement are expected to enhance Equipmake’s position in the electrification sector and contribute to Caterpillar’s broader sustainability and technology goals. The news is based on a press release statement from Equipmake Holdings PLC.
