Smith Electric Vehicles US Finalizes Purchase of Smith Electric UK for $15M

Smith Electric Vehicles US (SEVUS) will finalize the purchase of its United Kingdom-based parent company, Smith Electric Vehicles (UK), creating the world’s largest manufacturer of commercial electric vehicles. The $15-million sale will be effective 1 Jan. 2011. Smith UK’s current owner, the Tanfield Group, will retain 49% equity in Smith Electric Vehicles US This percentage is subject to dilution as Smith raises additional equity capital.

The purchase will be split into 20 payments, payable monthly, with the first payment made on completion of the sale. Interest will accrue on the principal outstanding amount at the rate of 4% over base rate. In the event of an IPO of SEVUS, the full balance would immediately fall due. SEV reported losses of £2.159 million (US$3.333 million) for the 6 months to 30 June 2010 and net assets at that date of £9.607 million (US$14.8 million).

This sale signals a bright future for the electric commercial vehicle industry. Being in a position to unify Smith’s divisions after less than two years of operating in the United States is evidence that the market for affordable, sustainable commercial fleets is fertile. The unification of Smith Electric Vehicles will create operational efficiencies and market synergies that will make Smith more financially sound and productive.

—Bryan Hansel, CEO of Smith Electric US

Smith UK has been a leading manufacturer of zero-emissions battery-electric commercial vehicles in Europe since the 1920s. It operates an unrivaled UK-wide service and support network that already maintains more than 5,000 vehicles for major fleet operators. The US branch of Smith, launched in 2008, has licensed the proprietary technology for its all-electric Smith Newton trucks from the US division.

In 2009 Smith Electric US licensed the technology from the Tanfield Group and began to introduce the Smith Newton to the United States. Smith Electric US is now a privately-held company owned by Private Investors, Tanfield, and Management, headquartered in Kansas City, Missouri. The consolidation enhances a possible public offering of its equity securities in the United States.

Source: Green Car Congress