Joy Global Inc. Chief Executive Officer Mike Sutherlin said the Milwaukee-based maker of mining equipment is considering acquisitions valued at more than $400 million and is in talks that may lead to a deal.
Sutherlin, who said in June he was weighing purchases of $100 million to $400 million, said he is now thinking bigger. While the medium-sized transactions are more likely given the availability of potential targets, Joy is looking at larger businesses as well, Sutherlin said today in an interview.
“There are some other larger acquisition, merger kind of possibilities out there that would be advantageous to our business, that would give us more scope and strength, and we are looking at those as well,” Sutherlin said. “We are prepared to go out and utilize our balance sheet and equity to finance good acquisitions.”
Joy had cash and cash equivalents of $748.6 million on July 30, according to a statement today announcing fiscal third- quarter results. The top priority for use of cash will be for building factories and service centers in growing markets followed by acquisitions, he said. The company also may consider share buybacks, Sutherlin said.
Joy may look for companies that provide access to a key technology, and potentially those that have field-service operations in countries such as India or Russia, Sutherlin said.
“We are looking for companies with strong international exposure,” Sutherlin said.
Joy rose the most since June 10 in Nasdaq Stock Market trading after the company raised its fiscal 2010 revenue and earnings forecast as customers expand mining to meet demand for commodities.
The shares rose $3.61, or 6.4 percent, to $60.16 at 4:30 p.m. New York time. They have risen 17 percent this year, giving the company a market capitalization of $6.2 billion.
Profit will be $4.10 to $4.15 a share for the year ending in October, up from the $3.85 to $4 a share forecast in June, the company said in a statement today. Sales will be $3.35 billion to $3.4 billion, compared with a previously forecast range of $3.3 billion to $3.4 billion, the company said.