Hitachi follows Bradken acquisition with H-E Parts buy

As reported in Nikkei Asian Review, Hitachi Construction Machinery has acquired two suppliers of parts and services for mining equipment with operations in the US and Australia, continuing its expansion into the support business amid sluggish demand in its mainstay machinery market.

The Japanese company recently announced the purchase of all outstanding shares of H-E Parts International and H-E Parts Australian Holdings for $240 million from H-E Parts Investors. The acquisition, funded through cash on hand and loans, is Hitachi Construction’s second mining-related deal this year after a recent agreement to buy Australian manufacturer Bradken.

The H-E Parts companies offer repair, maintenance and other aftermarket support for mining equipment such as dump trucks and hydraulic excavators. They operate mainly in the Americas and Australia, markets where Hitachi Construction, which is strongest in Asia and Africa, is racing to build a customer base.

“Going forward, the resource sector will need to find ways to improve safety and productivity,” said Hitachi Construction President Yuichi Tsujimoto. The company plans to complete its acquisition of Bradken in February, broadening its lineup of parts such as teeth for excavator buckets.

Hitachi Construction is also putting the “internet of things” to work to boost on-site productivity, using technology gained through its 2009 purchase of Canadian system developer Wenco International Mining Systems. With the H-E Parts deal, the Japanese company aims to increase points of contact with customers.