Siemens recently helped two crane companies, Mountain Crane Services in Utah, USA, and the Baldwins Crane Hire in the UK, to purchase high capacity Liebherr all terrains.
In the UK, Baldwins used a sevenyear, £2.6m, lease from Siemens Financial Services (SFS) to purchase an LTM 1500-8.1. The company also recently worked with SFS to buy a series of Nooteboom trailers.
The Baldwins crane will be suitable for a wide range of heavy lift applications. Brian Foster, head of industry finance at SFS in the UK, noted the importance of understanding how a crane will be used when arranging a deal like this, saying, "Because of our industry experience and our in-depth understanding of the market, we are able to accurately evaluate the quality of the financed asset, in particular in large transactions, thereby providing customers with a competitive financing package that not only enables their investment, but also optimises their cash flow."
That’s an approach that has served Siemens and its borrowers (‘obligors’, in the language of the finance sector) well on the other side of the Atlantic.
In Utah, Mountain Crane Services purchased a Liebherr LR 1600-2, again with financing from SFS (this time, $4.35m). Siemens involvement in the deal doesn’t end there though: Mountain Crane will now use the new 600t crawler to service and maintain Siemens Energy wind turbines across the USA.
Paul Belcher, co-owner of Mountain Crane Services, says, "SFS consistently acts as our go-to financing expert, providing guidance when we need to acquire new capital equipment. Their support has been an invaluable resource for our team."
Key to that support has been Siemens understanding of how the crane will be used. Gary Amos, head of Americas for commercial finance at SFS, says, "This transaction represents a solid collaborative effort between Siemens Energy, SFS and Liebherr to benefit our customer. We worked directly with Siemens Energy to understand and evaluate the deal from a risk perspective. The result was a win-win for all parties."
Siemens regularly looks at financing deals in this way, working with capital equipment companies that are going to use the equipment they purchase to work with other sectors of the business, or with manufacturers who use Siemens technology.
Amos says, "SFS has a long history of financing industrial assets, stretching back over the last 14 years in the US. We announced a new programme in 2011 that allowed us to realign and refocus around Siemens sectors and adjacencies. Through this realignment, SFS is focused on providing financing across four core sectors: energy, infrastructure and cities, healthcare, and industry. We then target vendors with linkages to Siemens technologies.
"Mountain Crane was a triangulated deal. We have programme agreements with Liebherr in countries around the world including the US, Europe, some APAC countries and Russia. And, we had Siemens Energy making wind towers. In a deal like that, we can sometimes marry the two. We look to the adjacency, the product, the customer, and the end use in order to provide the appropriate financing solution.
"We’ll look at the deal in a ‘one Siemens framework’. We’ll look at lots of indices to assess the sustainability of the deal. We’ll look at five, six, seven years, economic trends, at the marketes under that, where they link with Siemens, and at the assets, whether they are sustainable through the cycle."
By knowing how obligors will use their cranes, and by knowing the manufacturers to which other segments of Siemens supply components, SFS feels able to offer financing even when overall market conditions are tough.
Amos says, "You go through the cycle, going back in 2009-10, a lot of major banks and financial institutions, stepped to the sideline, and didn’t lend aggtresively, or cut off lending. We managed through the cycle, we lent throughout the cycle, and even grew our lending . That showed our sustainability as a trusted partner.
"Our knowledge of lending capital is deep and wide. But we’re also close to the sectors that many of our obligors work in, so we can also help connect them to technology.
Additionally, as a customer, if you want to learn more about our technologies and services, we can make the necessary contacts within Siemens. Finally, you can look to Siemens to borrow $20,000-$20m as our finance platform services transactions of all sizes in a diverse set of global markets."
