Cleveland Bros

The Companies

Cleveland Brothers Holdings, Inc. (“Cleveland Brothers”), through its wholly owned subsidiary, is a Caterpillar® equipment dealer that serves the central Pennsylvania region. Beckwith Machinery Company and One Call Rentals (collectively, the “Company”) was founded in 1907 and is one of the oldest Caterpillar® dealers in the world. The majority of the Company’s business consists of selling and servicing Caterpillar® equipment in western Pennsylvania and the northern parts of West Virginia and Maryland.

The Situation

Cleveland Brothers was approached with an opportunity to acquire the Company. Cleveland Brothers’ management team recognized the enormous potential of the proposed acquisition, as the combined company would serve a significant portion of the state of Pennsylvania and parts of West Virginia and Maryland. Additionally, a combination with the Company would make Cleveland Brothers one of the largest Caterpillar® dealers in the United States. To capitalize on the expected synergies of purchasing a contiguously located Caterpillar® dealer, the management of Cleveland Brothers pursued an acquisition of the Company.

The Solution

KPMG Corporate Finance was engaged by Cleveland Brothers to analyze the prospects of the Company, create financial models that provided a framework from which to conduct extensive and complex sensitivity analyses, analyze the capital structure of the combined business post-transaction, and produce detailed pro forma consolidated income statements, balance sheets and cash flows for evaluation by Cleveland Brothers’ management and financial institutions. Working closely with Cleveland Brothers’ team, KPMG Corporate Finance successfully completed its mandate in assisting in the closing of the transaction.