Tudor Van Hampton Zoomlion exhibited near Caterpillar last December in Guangzhou.

Changsha, China-based Zoomlion Heavy Industry Science and Technology Development Co. has inked a contract to acquire Milan, Italy-based CIFA S.p.A. in a joint-venture bid that includes Goldman Sachs and two other investors for $422 million.

Zoomlion's expansion of CIFA into the concrete-equipment business would mark the largest investment made by a Chinese construction-gear company to expand overseas, analysts say. The all-cash transaction would transfer CIFA's ownership for the second time in two years, from Italian private-equity firm Magenta Fund to a relatively unknown, still-emerging Chinese manufacturer.

Zoomlion says it will pay $50 million out of its own cash reserves and borrow $200 million to complete the deal for a 60% stake. New York-based Goldman Sachs and China-based Mandarin Capital Partners and Hony Capital would hold the balance. The investors have not yet said when they expect to close the sale.

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Zoomlion hopes to boost revenue overseas to reach 40% of its total sales by 2010 and compete with large, multinational firms like Peoria, Ill.-based Caterpillar Inc. Zoomlion's overseas sales hit $148.6 million last year, about 11% of its total sales, according to published reports.

Financial analysts note that the deal is the second major international play for a Chinese construction-equipment company since Changsha-based rival Sany Heavy Industry Co. Ltd. announced that it would invest $100 million on a manufacturing campus near Peachtree City, Ga.

The first phase of the project includes 400,000-sq-ft of assembly, testing, parts, training and office space, costing about $30 million. The company says it expects to begin construction this year and finish within two years.

Sany hopes the Peachtree shop "will be the facility that fuels Sany's entry into the U.S. construction equipment market, as well as the first step in the globalization of the Sany brand," according to an environmental permit application Sany America Inc. filed on April 29.

Phase two of the project includes a 50,000 sq-ft office building, 50,000-sq-ft research center as well as residential condos for employees.

The final site plan for the first phase, prepared by architecture firm Perkins and Will, is under review.