US based Smith Electric Vehicles Corporation agrees to acquire Smith Electric Vehicles business based in the UK

US based Smith Electric Vehicles Corporation last week signed an agreement that will see it acquire the Smith Electric Vehicles business in the UK. Smith Electric Vehicles US Corporation will acquire the UK based business from its owner Tanfield Group for US$15 million.

The transaction and the transfer of ownership of the UK division will be effective on 1 January 2011. Following the transaction, Tanfield will retain a 49% holding in the enlarged Smith EV US business. The consideration of US$15m will be split into 20 payments, payable monthly. The first payment will be made on completion of the transaction, on 1 January 2011.

Smith EV originally announced its intention to buy the UK business on 10 March 2010, when it made a conditional offer. The offer was conditional on successful financing by Smith EV US and shareholder approvals on the part of Tanfield.

Bryan Hansel, chief executive officer of Smith US had earlier noted, when the offer was first made back in March that once completed, the transaction was expected to create a unified entity that will be well positioned globally for growth in the rapidly expanding electric commercial vehicle market. Hansel had as well reiterated his believe that the combination would create operational efficiencies and market synergies that will help Smith continue its strong sales momentum and cost reductions.

The transaction includes the purchase of all the Smith US common stock held by Tanfield, the license agreement by and between Tanfield and Smith US, and the intellectual property necessary to combined the two businesses and operate globally.

Tanfield plans to use the proceeds from the sale in its core Powered Access division. Smith US' plans for the consolidated entity include a possible initial public offering (IPO) of its equity securities on the US Nasdaq exchange. According to Tanfield, the Smith EV UK business posted a loss of £2.16m (US$3.33m) for the six months to the end of 30 June 2010. At that date, the business' net assets stood at £9.61m.

Smith Electric Vehicles U.S. Corporation is a Delaware corporation and an all-electric zero-emissions commercial truck manufacturer. The company licenses its proprietary technology from the Smith Electric Vehicles business in the U.K., the world’s largest manufacturer and industry leader of commercial electric vehicles. Smith U.S. produces the Smith Newton – the world’s largest battery-electric-powered truck.

The Tanfield Group Plc is the world’s leading developer and manufacturer of road-going commercial electric vehicles and aerial work platforms.

26 Dec 2010.