Penn Detroit Diesel Allison

Industry: Transportation Services/Distribution
Initial Ownership: 80.3%
Date of Initial Equity Investment:
July 2006

Business Description: Penn Detroit Diesel Allison (“PDDA” or the “Company”) is a distributor of new equipment and aftermarket parts and a provider of maintenance, repair and overhaul services to the heavy-duty truck industry and power generator set users. PDDA is an authorized distributor of Detroit Diesel engines, Allison transmissions, Carrier Transicold refrigeration units, MTU standby power generator units and GE Jenbacher continuous power generator units. PDDA has twelve locations, primarily in Pennsylvania, New Jersey and upstate New York.
Investment Thesis: The deal team identified several strengths and opportunities that made PDDA a compelling platform:

  • Attractive maintenance, repair, and overhaul business model provides stable cash flows that grow with equipment population.
  • Experienced management team with meaningful equity stake
  • OEM-authorized territories create high barriers to entry (distributors typically are given exclusive authority to sell parts and provide warranty repair work within their territories.
  • Long-term relationship with suppliers. The Company had recently signed a 7-year agreement with its largest supplier. The Company had never lost an OEM authorization.
  • Diverse customer base and end markets.
  • Opportunity to expand product offerings and add-on new territories.
  • Increase marketing to new industry groups.
Investment Highlights: Under the deal team’s leadership, PDDA purchased an adjacent Carrier Transicold territory and location. The Company then expanded the product and service offering at this new location. Additionally, the Company increased its marketing to alternative energy opportunities and to Marcellus shale opportunities in western Pennsylvania.

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