San Diego-based Robbins Arroyo LLP is the latest law firm to file a class action lawsuit against Milwaukee-based Rev Group Inc., alleging the company misled shareholders in its initial public offering.
The specialty vehicle manufacturer made its IPO in January 2017 at $22 per share, and saw its stock price rise 26 percent by June 30, 2017, but it has since fallen. Rev Group’s stock today opened at $15.73
REV Group makes 28 brands of specialty vehicles at 15 locations, many of which are in the Midwest. The company has more than 6,000 employees. The company has made several acquisitions in recent months. It acquired Lance Camper in January, Midwest Automotive Designs LLC and Ferrara Fire and Apparatus in 2017, and Renegade RV in 2016.
According to Robbins Arroyo, “REV touted that it had achieved sustained growth across its operating metrics and that its ability to control costs and its unique visibility into future revenue streams were key competitive advantages that would allow it to grow margins and provide investors with predictable financial results.”
But Robbins Arroyo alleges Rev’s acquisitions made its operational structure inefficient and did not allow it to control costs.
Several other law firms have also filed class action suits against Rev in recent weeks related to its financial statements ahead of the IPO.
“REV did not have leverage over its suppliers, subjecting it to sudden and substantial costs increases on critical parts and materials,” according to Robbins Arroyo.
In June, the company announced a $1.9 million restructuring effort, expected to generate $20 million in annualized savings.
Rev Group chief executive officer Tim Sullivan could not be reached for comment this morning.