REV Group Gears Up for IPO

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REV Group has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). No pricing details were listed in this filing, although in the last filing the company valued the offering up to $100 million. The company intends to list its shares on the New York Stock Exchange under the symbol REVG.

The underwriters for the offering are Goldman Sachs, Morgan Stanley, Baird, BMO Capital Markets, Credit Suisse, Deutsche Bank, Jefferies, Wells Fargo and Stifel.

This company is a leading designer, manufacturer and distributor of specialty vehicles and related aftermarket parts and services. REV serves a diversified customer base primarily in the United States through three segments: Fire & Emergency, Commercial and Recreation.

REV provides customized vehicle solutions for applications including: essential needs (ambulances, fire apparatus, school buses, mobility vans and municipal transit buses), industrial and commercial (terminal trucks, cut-away buses and street sweepers) and consumer leisure (recreational vehicles (RVs) and luxury buses).

Its brand portfolio consists of 26 well-established principal vehicle brands, including many of the most recognizable names within its served markets. Several of its brands pioneered their specialty vehicle product categories and date back more than 50 years. The firm believes that in most of its markets, it holds the first or second market share position.

REV Group listed some of its financial highlights as:

  • Net sales were $1,721 million, $1,735 million and $1,926 million for fiscal year 2014, fiscal year 2015 and fiscal year 2016, respectively, which represents a compound annual growth rate, or “CAGR,” of 3.8%.
  • Net income was $1.5 million, $23 million and $30 million for fiscal year 2014, fiscal year 2015 and fiscal year 2016, respectively, which represents a CAGR of 173%.
  • Adjusted Net Income was $14 million, $34 million and $55 million for fiscal year 2014, fiscal year 2015 and fiscal year 2016, respectively, which represents a CAGR of 56%.
  • Adjusted EBITDA was $62 million, $90 million and $127 million for fiscal year 2014, fiscal 2015 and fiscal year 2016, respectively, which represents a CAGR of 27%.

The company intends to use the net proceeds from the offering to redeem its outstanding senior secured notes and pay the related call premium, as well as to pay for other outstanding debt. The remainder will be used for working capital and general corporate purposes.

By some metrics, 2016 has been a dismal year for IPOs. Still, the market has improved handily and we have featured the 18 biggest companies that may IPO in 2017.