Milwaukee-based specialty vehicle maker Rev Group Inc. hopes to raise $231.4 million in its initial public offering and use the money to pay down long-term debt.
The company, which moved its headquarters to Milwaukee from Orlando last year, plans to offer 12.5 million shares of common stock in the offering and is expecting it to be priced between $19 and $21 per share.
The midpoint of that range would give the company $231.4 million in proceeds after expenses and underwriting discounts. A $1 per share change in the price would increase or decrease the proceeds by $11.7 million.
Rev Group plans to use approximately $192.1 million to pay off its outstanding senior secured notes, which have a fixed interest rate of 8.5 percent and mature on Nov. 1, 2019. The company will also use up to $39.3 million to pay on its asset-based loans.
The potential total proceeds from the IPO represent a significant increase over the company’s initial filings, which suggested it would raise $100 million.
The company has been approved for listing on the New York Stock Exchange under the ticker symbol REVG. The offering will be priced and begin trading sometime next week, although an exact date has not been set.
New York-based private equity firm American Industrial Partners currently owns almost 90 percent of the company’s shares. That figure will drop closer to 72 percent after the offering.
In November, Rev Group chief executive officer Tim Sullivan said the offering would offer the company’s private equity ownership an opportunity to exit while also providing capital to accelerate Rev Group’s growth.
“We’re going to need capital to grow and we’re going to need significant capital,” he said.
Rev Group was formed out of the acquisition of a number of specialty vehicle brands over the last ten years and was previously known as Allied Specialty Vehicles. The company manufacturers fire trucks, ambulances, commercial buses and recreational vehicles.
Sullivan became CEO in 2014 and has worked to bring the network of brands into a more unified corporate structure.
In fiscal 2016, the company reported an 11 percent jump in net sales to $1.93 billion and net income was up 32 percent to $30.2 million
Moving forward, the company is looking to grow by improving its margins through operational initiatives, developing new customer offerings, enhancing sales and distribution, accelerating aftermarket growth and pursuing value enhancing acquisitions.
