H-E Parts Acquires Brake Supply's Mining Machinery Component Remanufacturing Business

Tokyo, November 5, 2024 - On November 1, H-E Parts International LLC (Headquarters: Georgia, USA; President and CEO: Simon Pelletier; "H-E Parts"), a consolidated subsidiary of Hitachi Construction Machinery Co., Ltd. (TSE: 6305, President and Executive Officer: Masafumi Senzaki; "Hitachi Construction Machinery"), reached an asset purchase agreement with Brake Supply Co., Inc. (Headquarters: Indiana, USA; President and CEO: David Koch; "Brake Supply"), a company engaged in the mining machinery component remanufacturing business. Through this acquisition, which is expected to be completed in early December 2024, H-E Parts will utilize Brake Supply's North American remanufacturing bases, parts warehouses, and human resources, thereby strengthening the structure of the remanufacturing business in the Americas.

In March 2022, the Hitachi Construction Machinery Group began its independent deployment of operations, ranging from new machine sales to the value chain business^*1, through its own network across the Americas. As a result, the company has been accelerating its business development in the Americas market, which is the world's largest.

*1: Business other than new machine sales, consisting of "parts and services," "specialized parts and services business," "rentals and used equipment," and other business.

H-E Parts provides comprehensive solutions for mining operations, including maintenance and repair of mining machinery and equipment, as well as parts fabrication and component remanufacturing to meet customer needs. The company is expanding its business globally, with a primary focus on Australia and the Americas.

Brake Supply's business activities include the remanufacturing of components for mining excavators and dump trucks, such as cylinders, fluid power components, wet brakes, and final drives. More than 90% of Brake Supply's sales are in North America, where the company has five remanufacturing bases, five parts warehouses, and many engineering-related human resources. Since there is little overlap between H-E Parts' existing North American bases and Brake Supply's bases, H-E Parts will be able to expand its service network quickly and efficiently through this acquisition.

In the Hitachi Construction Machinery Group's "BUILDING THE FUTURE 2025" medium-term management plan that began in FY2023, "Expanding business in the Americas" is positioned as one of the four core strategies. Through this acquisition, H-E Parts aims to expand the scale of its business in the Americas region.

Comment from Simon Pelletier, President and CEO of H-E Parts

This acquisition allows us to strengthen our offerings and expand our footprint. By welcoming Brake Supply into the H-E Parts family, we are combining our capabilities to offer an even wider range of products and services to our customers. We are excited to bring Brake Supply’s associates, customers, and suppliers into our organization.

Comment from David Koch, President and CEO of Brake Supply

Brake Supply has been committed to providing customers with reliable, cost-effective alternatives to OEM components for decades. Joining forces with H-E Parts allows us to build on that commitment and extend our reach, creating new growth opportunities for our team members and even more value for our customers.

Outline of H-E Parts

Outline of Brake Supply

Related information

About Hitachi Construction Machinery Co., Ltd.

Hitachi Construction Machinery Co., Ltd. (TSE: 6305), headquartered in Tokyo, Japan, is a construction machinery manufacturer which globally deploys development, manufacturing, sales, and service businesses for its hydraulic excavators, wheel loaders, compaction equipment, and mining machinery, etc. In addition to its new machinery business, Hitachi Construction Machinery is expanding its "value chain businesses" of parts and services, remanufacturing (parts and machines), rentals, and used equipment as it aims to grow together with customers as a true solutions provider that offers innovative solutions to customers. As our vow to all stakeholders to achieve this mission, we established and are currently disseminating and promoting the LANDCROS as our new concept. With roughly 26,000 employees around the world, the consolidated sales revenue for Hitachi Construction Machinery was 1,405.9 billion yen for fiscal year 2023 (ended March 2024) with an overseas sales revenue ratio of 84%. For more details, please see the company's website.

Information contained in this news release is current as of the date of the press announcement, but may be subject to change without prior notice.