At GE Capital we used our understanding and experience of asset funding to help TransDiesel realise a key business opportunity which set their business up for growth.
Business at a glance
$40M 2009 to $110M 2012
TransDiesel was started in 1981 by two diesel mechanics returning to New Zealand after doing their big OE. Whilst overseas they had acquired an ‘out of work’ Allison transmission, which they had rebuilt in the lounge of their London flat. It was a great example of Kiwi ingenuity.
They shipped it home to New Zealand, sold it for $6,000 and TransDiesel was born. During the mid 80’s, due to their success at repairing and selling rebuilt Allison transmissions and Detroit engines, the US principals appointed them as the NZ distributor. In 1989 they also became the distributor for Terrex product-detailsducts, which conveniently utilised both Allison transmissions and Detroit engines.
By the mid 2000’s the company had grown to over 100 employees with a turnover of $50M annually. However as a business they realised that they needed to improve their business structure, so in 2007 they appointed an independent Board and a Chairman.
In 2008 they bought in Mike McKessar, as Managing Director, to run the business. Alister McLaughlin, Director and one of the original owners, said “We realised that if we wanted to get bigger and have a proper business we really needed to have some sort of brand.”
Whilst they had the Terrex brand in New Zealand, it had a limited product range so they knew they needed to look for another opportunity. With 75% of the equipment industry based around excavators, they knew this was where they needed to set their sights. In New Zealand however, five major brands dominate the excavator market, and the opportunity to get involved with these brands rarely comes up.
Whether it was good timing or good luck, an opportunity came up in March 2012 for TransDiesel to pitch for the Volvo distributor rights for New Zealand. And as Mike McKessar, Managing Director stated “when the Volvo thing came up we were really keen to look at it as it gave us access to a bigger market”.
As an eight year relationship already existed between TransDiesel and GE Capital, they wanted to know what we could do to keep the deal alive.
GE flew down the next day and within three weeks they had the funding in place and the deal was done, very impressive and we were very grateful because if that hadn’t happened I don’t know what we would have done, we would have been in trouble” says Alister McLaughlin.
We set up a flexible floor-plan solution that allowed TransDiesel to hit the ground running, doubling turnover in just two years. At GE Capital, we have been working on equipment finance and leasing, floorplan funding, and import finance in New Zealand for over 20 years.
We have a deep understanding of the best way to fund assets to get the true value for businesses and this allowed us to assess the TransDiesel opportunity quickly and ensure a long term, tailored facility was implemented. It’s this kind of real world thinking that fuels powerful growth for Kiwi businesses.
As we are part of GE, the sixth largest brand globally, we also have access to and leverage vast international networks. This is a benefit that Mike McKessar highlights “two months prior to a product going into production we confirm the order, and at that time Volvo go directly to GE Capital to ensure we have the facility to be able to do it, the machinery comes out of the factory and GE Capital pays Volvo directly”
And to sum up what it has meant for TransDiesel, Alister McLaughlin says “we’d been waiting 30 years to get that lucky. To get a really mainstream brand like Volvo has been fantastic.”
People who viewed this also viewed
Inventory & Floor Plan Finance for Dealers
A dedicated inventory funding line gives you the ability to stock more and sell more inventory with the added benefit of freeing up your cash flow and reducing your administration costs.Find out more
We helped Big Chill focus on change management to maintain a competitive advantageRead the full story