Filing Flows › Caterpillar (CAT) › Takeover & LBO
Is Caterpillar (CAT) a takeover target?
A leveraged buyout at today's price plus 30% ($719.73 a share) would return about 3% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $404.10 a share (−27% against today's $553.64). At $360.0B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 3.2% of companies with its figures were bought within a year (0.63× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $719.73 | today's $553.64 plus 30% |
| × shares | 460.9 million | |
| = Equity value | $331.7B | |
| + Debt refinanced | $36.2B | |
| − Cash | $7.9B | |
| + Other claims | −$1.0M | preferred stock, minority interests |
| = Enterprise value | $360.0B | 21.6× EBITDA of $16.7B |
| Fees | $7.2B | 2% of the price |
| New debt | $91.7B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $275.5B | 75% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $84.0B | $18.0B | $7.0B | $5.3B | $86.4B |
| Year 2 | $89.7B | $19.2B | $6.6B | $6.5B | $79.9B |
| Year 3 | $94.6B | $20.3B | $6.1B | $7.6B | $72.3B |
| Year 4 | $98.6B | $21.1B | $5.5B | $8.7B | $63.7B |
| Year 5 | $101.6B | $21.8B | $4.9B | $9.7B | $54.0B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 17.0× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $370.2B | |
| − Debt left | $54.0B | |
| = Buyer's equity | $316.2B | |
| Money multiple | 1.15× | on $275.5B put in |
| Buyer's yearly return (IRR) | 2.8% |
Price against return
What the buyer makes at other premiums over today's $553.64; the IRR reaches 20% at $404.10 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $609.00 | 7.2% |
| 20% | $664.37 | 4.9% |
| 30% | $719.73 | 2.8% |
| 40% | $775.10 | 1.0% |
| 50% | $830.46 | −0.7% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $77.8B | |
| EBITDA, last 12 months | $16.7B | 21.4% of revenue |
| Depreciation and amortization | $2.4B | |
| Capital spending | $2.9B | |
| Debt | $36.2B | |
| Cash | $7.9B | |
| Share price | $553.64 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 23% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Caterpillar would cost about $775.10 a share, $357.2B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 14.7% | $635.03 | $292.7B |
| Median | 40% | $775.10 | $357.2B |
| High end (a quarter paid more) | 60.2% | $886.93 | $408.8B |
The odds, from history
Historically 3.2% of companies with its figures were bought within a year (0.63× the average). Its figures put it in decile 2 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Caterpillar's latest quarter
Caterpillar, Q3 2026: revenue $20.7B (+17% year over year), operating margin 20.4%, net earnings $3.3B, operating cash flow $4.4B. The chart follows the revenue to costs, profit and cash.
Questions
Is Caterpillar being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Caterpillar?
A leveraged buyout at today's price plus 30% ($719.73 a share) would return about 3% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $404.10 a share (−27% against today's $553.64). At $360.0B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Caterpillar cost?
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Caterpillar would cost about $775.10 a share, $357.2B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.