November 20, 2015 Updated 11/20/2015
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Tom Henderson
Crain’s Detroit Business
UnderCover, Truck Hero Inc. Truck Hero Inc.’s product lines includes ABS tonneau covers sold under the UnderCover brand name.
Unable to get the price per share it was looking for, Ann Arbor, Mich.-based Truck Hero Inc. has postponed the initial public offering it planned for today, and its executives did not ring the opening bell on the New York Stock Exchange as planned.
Truck Hero, a fast-growing maker and seller of aftermarket parts for trucks and SUVs, including polypropylene truck bed covers, composite truck caps and bed liners, had hoped to raise about $ 240 million in its IPO and be listed on the exchange under the symbol TRUK, according to a document filed with the U.S. Securities and Exchange Commission.
In that filing, the company said it had a target price per share of $ 19.
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The plan was to price the shares after the close of market Thursday, but that pricing was canceled and so was the IPO when the company realized the appetite for its stock was less than anticipated.
In a news release, the company said it “will continue to evaluate the timing for the proposed offering as market conditions develop.
“Truck Hero has been experiencing strong organic growth and impressive performance. We have created significant value, and we are unwilling to sell shares at prices that do not reflect the value we have created,” company President and CEO Bill Reminder said.
“We remain a very healthy company with backing from a supportive financial investor, a strong growth strategy, and great traction in executing against that strategy. We are committed to continuing to execute our plan, and we do not believe this decision will impact our ability to meet our ongoing growth goals.”
Truck Hero markets products under eight primary brands: Extang, TruXedo, UnderCover, Advantage, Retrax, BAK, A.R.E. and BedRug.
It has plastics in a variety of those brands. BedRug makes custom-fit PP bed liners and other injection molded plastics. UnderCover makes ABS one-piece bed covers while A.R.E. has custom-made fiberglass truck caps and covers.
The company was formed as Tectum Holdings Inc. in 2007 when New York-based private equity firm Kinderhook Industries bought and merged Ann Arbor-based Extang Corp. and Yankton, S.D.-based TruXedo Inc.
Reminder was president and CEO of Extang.
In July 2014, a majority share of Tectum Holdings was acquired by Boston-based private equity firm TA Associates Management LP. Terms of the deal were not disclosed, but Kinderhook retained a minority share.
At the time of the deal, Tectum Holdings had completed seven acquisitions and increased revenue more than 600 percent.
One advantage of going public for Truck Hero would be to fund future acquisitions with stock instead of increasing its debt.
In October, in anticipation of the IPO, the name of the company was changed to Truck Hero Inc.
Also in October, the company entered into a purchase agreement to buy N-Fab Inc. of Houston, a maker of tubular accessories for pickups and SUVs, in a deal expected to close later this month or in December.
According to the SEC filing, Truck Hero had net sales of $ 436 million in 2014, with a net loss of $ 6.1 million.
For the nine months that ended Sept. 30, the company had net sales of $ 378.4 million and net income of $ 14.2 million. That compares to net sales of $ 322 million and a net loss of $ 6.6 million for the first nine months of 2014.
The lead underwriters were J.P. Morgan Securities LLC, Robert W. Baird & Co. Inc. and Bank of America Merrill Lynch.
