By adding the Quadco felling heads and Southstar large harvester heads to the existing lines of Log Max and Komatsu small and medium-sized harvester heads, Komatsu will become an industry leader in forestry attachments. This will allow Komatsu to offer its customers a full range of forestry attachments. Quadco and Southstar will continue to operate as independent companies within the Komatsu group following the completion of the acquisition and will maintain their existing sales networks. In order to offer improved value to customers, a forestry attachment division within Komatsu Forest AB will be formed, which will manage the Quadco, Southstar, and Log Max brands.

Komatsu anticipates that this acquisition will have no material impact on its consolidated business results and performance for the current fiscal year ending March 31, 2018.

1. Background and Objective of the Acquisition
In April 2016, Komatsu launched a plan for growth. In line with this plan, Komatsu decided to make this acquisition and expand its forestry attachment business. Forestry attachments are classified into two categories: the Cut to Length (CTL) method, which involves the use of a harvester and forwarder and is popular in Europe, and the Full Tree Length (FTL) logging method, which involves the use of a felling head attached to a base-machine and a skidder, which is popular in North America. The global market for forestry machines, including forestry attachments, is continuing to grow at a rapid rate. It is anticipated that there will be particular growth in the North American market, where FTL is the dominant method.

2. Method of the Acquisition
Komatsu will acquire the forestry attachment operations of the Quadco and Southstar brands through a wholly owned subsidiary.

Quadco                                                                              Southstar