Westrac has bought the local arm of US parts and services business Bucyrus for US$400 million ($389 million).

Seven-owned WesTrac, the Caterpillar heavy machinery dealer in New South Wales, the ACT, and Western Australia, will take on Bucyrus' business in those states as a result of the deal with Caterpillar.

WesTrac said the acquisition would add annual revenue of $600 million to $650 million from the 2012/13 financial year.

The deal would be funded by a new five-year loan, WesTrac said.

Bucyrus provides parts and services to heavy machinery used primarily in the resources sector and was bought by Caterpillar for US$8.8 billion in July 2011.

“The Bucyrus product line and large installed base are a logical addition to our current range of Cat product, and will provide us with significant opportunities for future growth with our mining customers,” WesTrac CEO Jim Walker said.

WesTrac is in discussions with Caterpillar over buying the Bucyrus operations in north east China, where WesTrac also conducts business.