Green vehicle innovator Sevcon has secured a £6.5m cashpot from investors as it powers ahead with ambitious growth plans.
The Gateshead-based zero-emission vehicle innovator has previously unveiled plans to grow organically and through acquisition, increasing its North East engineering team as well as recruiting additional worldwide sales staff.
Now the NASDAQ-listed firm has the firepower to do just that after successfully raising $10m (£6.5m) from shareholders to support its growth, two months after launching a rights issue, saying some of the additional funds may be used for potential overseas acquisitions.
The stock offer by the Gateshead-based company, which is listed on the NASDAQ in New York, was oversubscribed by 50%, demonstrating the company’s compelling current proposition.
Sevcon said it intends to use the money raised for potential acquisitions, investment in research and development and staff recruitment, with up to 40 new skilled jobs potentially for the North East.
Sevcon president and chief executive officer Matt Boyle said: “We are delighted by the response of our shareholders to the rights issue and especially grateful to our larger shareholders, Gabelli Funds and Wells Fargo, for their substantial oversubscription.
“Our plans for deploying the capital raised in the offering are being worked through, and we look forward to updating stockholders on our progress in the coming months. It was extremely important for us to raise these funds in order to facilitate the continuing growth of the business, both organically and inorganically.”
Earlier this year Sevcon unveiled a Chinese joint venture to take advantage of the opportunities in the world’s fastest growing low carbon, on-road vehicle market, and it recently reported its sixth consecutive quarter of growth with annual sales up 20%.
When the stock offer was launched, Mr Boyle said: “There are substantial opportunities today to expand our business both organically and through acquisitions, particularly in new markets for us, like China, and in the electrification of systems.
“To successfully achieve the organic growth, we need to increase resources such as headcount in engineering and sales. In addition, management is regularly reviewing plans and seeking to grow the business profitably, which could include by acquisition.
“We believe that, when we identify a possible acquisition, it would be desirable to have the resources at hand to complete any transaction quickly.”
The rights issue has also given staff the opportunity to take a stake in the company and the number of staff with shares has risen from seven to 24.
Mr Boyle added: “We also thank our employees, who subscribed for a significant number of shares.”