Finning International Inc.

Finning International Inc.

June 14, 2007 02:00 ET

Finning Sells Hewden's Tool Hire Division for Approximately GBP 115 Million, C$245 Million

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 14, 2007) - Finning International Inc. ("Finning") (TSX:FTT) announced today that its United Kingdom subsidiary, Hewden Stuart Plc has agreed to sell the business and assets, excluding real estate, of its tool hire division to a wholly owned subsidiary of Speedy Hire Plc, of Merseyside U.K. ("Speedy"), for a gross sale price of approximately GBP 115 million or C$245 million. The transaction is subject to the satisfactory completion of various closing conditions and adjustments and is expected to close on or about July 31, 2007.

The transaction covers 188 Hewden trading locations. Approximately half of these locations are serviced through depots located on properties owned by Hewden and the balance are located in leased premises. The purchase price excludes the owned properties which have an estimated market value of approximately GBP 25 - 30 million (C$53 - 64 million). Finning expects to dispose of these holdings in an orderly fashion. Following the sale of the tool hire business, Hewden will have 102 remaining locations which will focus on the plant hire (equipment rental) business and related complementary rental equipment.

"Narrowing Hewden's business lines will allow us to focus our financial and management resources on those areas most closely associated with our Caterpillar equipment related core strengths," said Doug Whitehead, President and CEO of Finning. "This transaction is the second significant sale of a portion of our U.K. operations in the last year. Combined with the anticipated property sales and the disposition of the Materials Handling business last September, these transactions will generate approximately C$500 million of gross proceeds. Finning remains committed to the U.K. market with our remaining business lines both at Hewden and at our Caterpillar dealership operation. Finning will continue to have a total of 128 locations and approximately 3,400 employees in the U.K. We are committed to providing all of our U.K. customers with a superior product and service offering while providing our shareholders with an appropriate return from our investment in the U.K."

"Hewden remains the U.K.'s number one plant hire (construction equipment rental) company. We intend to build on our core strategy of providing customers with instant availability of a comprehensive range of high quality plant, supported by the best customer service offering in the industry," said Andy Fraser, Managing Director of the Finning UK Group. "Hewden will focus on those markets where we are, or expect to be, the leading provider of rental and related services. The business will continue to be backed by an extensive branch network, over 2,000 rental professionals, a large fleet of low-hours equipment, and an emphasis on safety. The Hewden rental offering includes over 6,000 Caterpillar machines with a broad range of complementary non-Caterpillar equipment and services."

The gross sale price, net of taxes and transaction costs is approximately equal to the net book value of the tangible assets and goodwill associated with the tools rental business. In addition, Hewden will incur restructuring and other costs associated with this disposition of approximately GBP 2 million or C$4.3 million after tax.

Proceeds from the sale will initially be used to repay short-term debt. While the Company will try to minimize the disruption associated with this transaction, it will have a short-term impact, and earnings in 2007 will be negatively affected as a result of changing customer relationships and product line changes, as well as the general adjustment of business flow at Hewden. As a result of the dilutive impact of this transaction, the 2007 earnings per share are expected to be at the lower end of the guidance range of C$1.48 to C$1.60 (equivalent of the pre-split guidance range of C$2.95 to C$3.20 provided in May 2007). The earnings impact is expected to be neutral in 2008. Finning is well positioned to consider future growth opportunities given its very strong financial standing.

Investor Conference Call

Finning will hold an investor conference call at 12:00 pm Eastern Time today, June 14, 2007 to discuss this transaction in further detail.

To access the conference call please dial one of the following numbers:

1-877-888-3490 (within Canada and the US)

416-695-9757 (for participants dialing from the Toronto area and overseas)

The call will be webcast live at and subsequently archived on the Finning website. A playback recording will be available at 1-888-509-0081 from 12:00 pm Eastern Time on June 14, 2007 until the end of business day on June 21, 2007. The passcode to access the playback recording is 645835 followed by the number sign.

Finning International Inc. is one of the world's largest Caterpillar equipment dealers. The Company sells, rents and provides customer support services for Caterpillar equipment and engines in Western Canada, the U.K., and South America (Argentina, Bolivia, Chile and Uruguay). Finning also owns Hewden, the largest equipment rental business in the U.K. Headquartered in Vancouver, British Columbia, Canada, Finning International Inc. is a widely held, publicly traded corporation, listed on the Toronto Stock Exchange (symbol FTT). For additional information please visit our website at

This release may contain forward-looking statements and information, which reflect the current view of Finning International Inc. with respect to future events and financial performance. Any such forward-looking statements are subject to risks and uncertainties and Finning's actual results of operations could differ materially from historical results or current expectations. Finning assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein do not materialize.

Refer to Finning's annual report, management information circular, annual information form and other filings with the Ontario Securities Commission and Toronto Stock Exchange for further information on risks and uncertainties that could cause actual results to differ materially from forward-looking statements contained in this report.

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