Sealing the Deal

Feature Sealing the Deal Difficult times require creative solutions, so it's no surprise that GSE manufacturers and operators alike sometimes turn to intermediaries for more flexible, and one-stop, GSE solutions, writers Richard Rowe By...

On the finance side, Stearn's career includes public and private debt placements, as well as multi-bank credit facilities and other financing transactions. In what is another string to its financing bow, Fortbrand has an equity stake in The Navigator Group, a
company formed initially to perform general equipment leasing and financing. (see "Capital Idea," GSE Today, June/July 2001).

"We know the values and are interested in taking equity positions with the equipment, so it's not just a financing situation that the buying institution is getting involved in," says Stearn. "Between the Navigator Group and our own banking relationships, we can make any size transaction work, if properly structured."

Working its niche between cost-conscious operators and uncertain manufacturers, Fortbrand has to rely on its industry intuition. Risks are carefully calculated. "Obviously, things have slowed down regarding new opportunities and this is clear throughout the industry," says Stearn, "On the other hand, we have got contracts from manufacturers who had sales lined up but saw traditional financial sources pull out."

Sealing Equipment 2One example last year involved an FBO — an increasingly important market for Fortbrand —- whose station in New Hampshire saw the financing it had lined up crumble away. "They called us, sent us the financials, which looked good, and we did the deal," says Stearn. "The next day they were back on track. This really helps the manufacturers from losing the sale."

More recently, Fortbrand helped finance a new FBO at Stewart International Airport in upper New York State. "Over the years, we have played an active role in start up operations where we put equipment in. Again, the reason is that if it doesn't work out [for the operator] we are comfortable taking the equipment back."

Stearn makes the process sound straightforward, but Fortbrand has taken the best part of 20 years to get to where it is now. The brainchild of ground support veteran Henry Foster, Fortbrand started life in 1983. Foster had begun his career in the 1960s when he founded a similar company and sold it to Hudson General who turned it into more of a ground services company (before themselves being taken over by Germany's GlobeGround). Years later, Foster returned to his GSE roots and looked to Stearn, then President at Hudson General, to become his partner. Stearn agreed to join Foster and brought with him a formidable contacts book full of excellent financial and transaction connections.

Stearn is the first to admit that a major breakthrough came with Fortbrand's relationship with Finnish winter service equipment manufacturer, Vammas. Fortbrand was instrumental in bringing the Finn's revolutionary PSB 5500H high-speed plow, broom and jet blower to the North American market — a huge piece of equipment that can Sealing Equipment 3clear runways at high speeds and provide great cost savings into the bargain.

In doing so, Fortbrand opened the eyes of an overseas company to new ways of doing business, and exposed North American airports to their first experience of an extraordinary piece of foreign snow removal technology. "The overall business had been growing nicely," says Stearn, "but then we came across the Vammas situation around 1997. That has given us a whole new aspect of business."

"Leasing was not a familiar concept to them [Vammas]," says Stearn. "Users were able to get what they wanted and then exercise purchase options on it."

Stearn was careful to address the question of aftermarket support — a thorn in the side of previous attempts by European companies attempting to break into North America. "We emphasized the need to have a good spare parts operation and technical support, and that's where we came in."

Fortbrand's resident engineer, Carl Lange, was fully trained on all aspects of the operation and maintenance of the PSB 5500H at the Vammas factory in Finland and has since served as Fortbrand's head of training and technical support for the unit since its introduction into North America. This training and technical know-how, coupled with the equipment being so specialized, has even seen some airports engage Fortbrand to provide contract maintenance for the Vammas equipment.

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