Our Customers’ Experiences
We offer a wide range of business solutions to assist our customers, no matter where they are in their business lifecycle.
These experiences illustrate how some of our customers overcame, with our help, particular challenges facing their business.
Business Succession: A Successful Management Buyout for Bremca Industries
It was a case of ‘making the right connections’ for the new owners of electrical firm, Bremca Industries Limited, who achieved a successful management buyout with the help of our capital solutions.
Bremca Industries is New Zealand’s leading manufacturer and reseller of switchboard, switchgear, control, automation and heating solutions.
The sale of the privately owned firm was achieved with a quasi-equity and debt funding solution provided by our development capital fund and National Bank Commercial Banking.
Andrew McLean, who has been an executive at Bremca for 11 years, formed a team with his Bremca colleagues. Their buyout proposal came together following discussions with the previous owner.
“Bremca is already a successful company,” Mr McLean says. “Our ambition is to grow the business by expanding and developing on the strengths and experience we have in the market.”
The buyout team looked at various options for financing the deal including support from other industry players, offshore interests, and proposals from their previous banker and equity arrangements.
“The National Bank stood out because it dealt with the equity and banking issues together,” says Mr McLean. “Working this way also allowed the transaction to be done discreetly without exposing the company to the scrutiny of competitors that an open sales process would bring.”
Tim Russell, The National Bank’s executive principally responsible for development capital investments, predicts it will be the first of many successful deals for local businesses. “The solution we developed with Bremca is typical of the flexibility we can now offer,” he says. “By providing equity and debt funding to facilitate transfer of ownership, takeovers, mergers or expansions, we help businesses achieve their goals and prosper.”
Christchurch-based Bremca was established in 1973, and now has 100 employees. It recently opened its seventh branch in the Bay of Plenty, adding to its network stretching from Auckland to Invercargill. Along with the design and manufacture of switchboards, Bremca also manufactures and supplies automation and process systems.
For further information on funding business succession, please contact your Relationship Manager.
Smiths City Group: Back on their Feet and Riding High
“There’s a perception that persists that banks are only too ready to offer an umbrella when the sun is shining but take it back when it rains,” says National Bank Managing Director Institutional, Corporate & Commercial Banking, Nigel Williams.
“That’s not The National Bank way. We know the essential role of a bank is to partner business through the ups and downs of the market cycle; to be there to help growth and during the repositioning for the next upward swing.”
Rick Hellings, Managing Director of retailer Smiths City Group knows exactly what that means. The Christchurch-based company has grown from a single store that opened nearly a century ago to a nationwide group comprising the Powerstore, Alectra, LV Martin & Son and Smiths City.
But it stumbled in the early 1990s, an overstretched victim of the bursting sharemarket bubble in 1987. It spent five years in receivership, before paying its first dividend in a decade and charting a new path for growth.
“The National Bank took the lead banking role in helping us get back on our feet,” Rick Hellings says. “They know our business well. They know there are cycles, and we have a strong partnership that allows the business to go forward.”
Edward Sparrow is Smiths City’s Christchurch-based Relationship Manager at The National Bank. He says it was important to allow the group to put the past behind it and focus on its well articulated acquisition and expansion strategy.
A retailer like Smiths City needs to grow its business – and Smiths City has done exactly that. They have expanded their South Island footprint through the Powerstore brand, and re-entered the
North Island through the acquisition of whiteware and appliance retailer LV Martin & Son in Wellington and Meikle’s furniture stores in the Bay of Plenty.
Smiths City has also expanded their already experienced property development arm in response to a growing trend in retailing.
“Until 2002, property was not a major issue,” says Rick Hellings. “The spread of Australian retailers, such as Harvey Norman, which was opening new large-store formats on low-cost sites near the edge of towns and cities, changed the retailing environment.”
“What Harvey Norman showed was that you could build a store half as big again as your nearest competitor and operate it for two thirds the cost,” says Rick. “We saw the need to develop our sites and The National Bank has supported that strategy.”
Today, Smiths City Group is one of New Zealand’s leading retailers, competing successfully with powerful Australian chains. The National Bank is proud to have helped them along the way.