Toromont to buy Quebecbased Hewitt heavy equipment business for 102 billion

MONTREAL — Toromont Industries Ltd. says its $1.02-billion purchase of the privately held Hewitt Group will give it an expanded network of Caterpillar heavy equipment dealerships in eastern Canada and more growth opportunities, especially in Quebec.Following the announcement before markets opened Monday, Toromont stock (TSX:TIH) set a new 52-week high of $50.95. The shares later gave up some gains but were still up 12 per cent at $50.29.Toronto-based Toromont said the acquisition of the 52-year-old Montreal-area company will add 45 branches and 2,000 employees in Quebec and the Maritimes.That will bring Toromont’s total number of Caterpillar dealerships to 120, located in Canada’s seven eastern provinces and the northern territory of Nunavut.Hewitt is also the MaK dealer for Quebec, the Maritimes and the Eastern seaboard of the United States, from Maine to Virginia.Toromont chief executive Scott Medhurst said the addition of Hewitt will put Toromont it in a more competitive position to take advantage of growing spending in the natural resource, infrastructure, and construction industries in Canada.Analyst Yuri Lynk of Canaccord Genuity said in a note to clients that “we believe Toromont has long coveted Hewitt and management has patiently waited for the day it became available.”Hewitt chief executive Jim Hewitt said in statement that the sale of the family business founded by his father makes sense given the trend towards consolidation in the sectors where the company operates.“The decision to sell the business founded 65 years ago by my father has not been an easy one, but is the outcome of much reflection on the part of my son David and me,” Jim Hewitt said in a statement issued at the same time as Toromont’s announcement.The deal expands Toromont’s presence in Quebec, where its CIMCO refrigeration division open since 1951 has 130 employees. The division services food distribution customers, community hockey rinks and curling clubs and arena’s such as the Bell Centre home of the Montreal Canadiens.The purchase for $917.7 million cash and the issuance of 2.25 million Toromont shares is expected to close by mid-October. read more