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Smith Electric Vehicles seeking private investment

Kansas City, MO-based Smith Electric Vehicles Corp. announced on Sept. 20th that it had decided not to pursue its planned initial public offering (IPO). The company said it would withdraw its registration statement on Form S-1 as filed with the U.S. Securities and Exchange Commission.

“We received significant interest from potential investors, however, we were unable to complete a transaction at a valuation or size that would be in the best interests of our company and its existing shareholders,” said Bryan Hansel, CEO of the privately held firm, in a ststaemnt. “We have instead elected to pursue private financing opportunities to support the execution of our business plan.”

Smith launched in the U.S. as Smith Electric Vehicles US Corp. and began producing trucks in 2009. Its initial truck design was drawn from Smith Electric Vehicles (U.K.), which was founded back in 1920. In January 2011, the U.S. Smith company acquired the British firm and formed what is now Smith Electric Vehicles Corp.

“The strategy behind our launching an IPO revolved around knowing the confidence of our client base of large fleets would be higher if we were publicly traded and they could thus access our public information,” Hansel told FleetOwner.

“With $50 million in revenue last year,” he continued, “we thought the market would give is the valuation we thought we deserved [to make an IPO successful]. But in talks with financing groups, the ultimate response we received was that we were not yet big enough or profitable enough at this time to make a public offering [and we should] come back when we are more appropriately sized for the public market.

“In short,” Hansel added, “we were not getting the valuation we wanted to move ahead with an IPO so we withdrew it. However, we feel we are only a couple of quarters away until we can re-assess our decision on a public offering. We will stay private until we get to that point.”

Further private funding, according to Hansel, will provide Smith the capital needed “to move our manufacturing processes to the next level of efficiency for higher volume. The result will be to drive up profitability by taking costs out of production.”

“We need to raise capital and that’s never easy, but we are in final round” of attaining it privately. He said the firm’s expectation now is to be profitable in the second half of 2013.

A posting by The Kansas City Star reported that Smith had “slashed its production target [from 620 to 380 trucks in 2012] for this year…” The newspaper also reported that thecompany said in filings with the Securities and Exchange Commission (SEC)that it made 79 trucks in the first six months of this year and intends to increase production later in the year to meet its lowered goal.

“The production downsize we stated in April for the SEC filing is accurate,” Hansel noted. “As we are moving on to a higher level of [manufacturing] suppliers to gain efficiencies and drive our costs down, we do not want to be building trucks to lose money on them,” he said candidl



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