Who's gonna buy Bobcat?

The announcement that Ingersoll Rand is putting its highly profitable Bobcat skid-steer loader line up for sale, along with its Utility Equipment and Attachments businesses, has the industry speculation mill working overtime.

While Bobcat is what caught everyone's eye, the Utility Equipment

And frankly, while everyone's talking about Bobcat, which is the jewel, the acquisition of the utility equipment group is also notable.

IR has said for at least a year that consistent profits from cyclical business like these were not possible. The company has made the decision to focus on its "climate control, industrial and security businesses," so things that go vroom in the night are up for sale. Thus the announcement shouldn't be too stunning.

Yet it is. Bobcat is one of iconic brand names in the off-highway equipment world. Putting an icon up for sale is always gonna create a buzz. And so it has.

Who's going to buy the largest skid-steer loader manufacturer in the world? The danger of a monthly magazine is that from the time this is written until it's published, things can change--making you look really smart or like a complete dummy. We'll take that chance, with that caveat.

The most common buyer names heard in the days immediately following IR's announcement were Volvo, Terex and Kubota. Our immediate take on that is: yes, probably not and nope.

Volvo's cash and ambitions in the off-highway world are well chronicled and Bobcat and/or the utility side would be a huge step.

Terex. We're thinking probably not, because whoever buys either group is probably going to overpay and that's not Terex's style.

There is a lot of speculation right now that Kubota would be interested if only to protect their engine sales to Bobcat. We don't think that's likely. Kubota tends to grow, not buy. Given the volume going into Bobcat, changing engines--especially with Tier 3 and Tier 4--is not that simple.

Our guess (see caveat) is that if it's not Volvo, it's going to be someone in Asia ... maybe Doosan or one of the Japanese manufacturers?

Our totally out of leftfield guess is one of the Chinese manufacturers. Talk about a fast one-step entry into the global markets. The conventional wisdom is the U.S. government would never let it happen. Maybe. It did allow the IBM sale. Maybe this becomes a bargaining chip. "We won't get in the way of this, if you open up access to buying some of your companies."

But as things have trended lately, some unknown venture capital or financial company may pop up with the will and the cash to pull the trigger on what is likely to be 2007's biggest deal(s).

Mike Osenga

mosenga@dieselpub.com