Can you discuss about two companies named Caterpillar vs. Komatsu and share your two takeaways briefly?

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Expert Solution

A komatsu is a company which is little better than Caterpillar which is its rival from the view point of “Buy Low”.

A Japanese dump truck maker announced the acquiring of a Joy Global at $28.30 billion which is including 3.6$ billion of debt. A company Komatsu is not swooping at such low price . The price pf the joy goes down $9 at the starting of the year. But it is still taking the joy at a 50% discount . And therefore now it takes a benefit of stability in commodity prices.

In other words if we say it can not be better for Komatsu to strike its biggest deal. And that makes the company Caterpillar for the for the purchasing of mining equipment maker company name Bucyrus at 8.6$ billion which includes debt too.

Caterpillar bought the company Bucyrus in the year 2011 for which it paid the amount of 15 times of the EBITDA of 12 months . and similiarly Komatsu paying 13 times of Joy EBITDA. When the company Caterpillar and other rivalry firms stuck various large deals Komatsu pursued small small takeovers by partnership or joint ventures etc.

Even the company Komatsu has not been immune to the mining slump but atleast it has not added its worries by burning a bunch of money on various deals.

jeff jeffy answered 1 year ago

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