Keith Cos. Hope to Raise $17.5 Million With IPO

Keith Cos. Inc., an engineering and design firm, will seek to raise as much as $17.5 million through an initial public offering.

The Costa Mesa company plans to sell 1.75 million common shares at $8 to $10 each, according to documents filed Thursday with the Securities and Exchange Commission. The shares for the public offering represent about 33% of the 5.31 million shares Keith will have outstanding after the stock sale.

The company will use the money to fund an acquisition, repay debt and meet general corporate requirements.

Keith Cos. is acquiring Thompson-Hysell Inc., a Modesto engineering and surveying firm that employs 45 people and had sales of $4.1 million last year.

The acquisition will boost Keith Cos.’ payroll to about 460 employees.

With revenue totaling $29 million in 1998, Keith describes itself as one of the leading engineering, consulting and technical services firms in the West. Last year, at least 50% of the company’s revenue was derived from commercial and residential real estate developments in Southern California.

In addition to real estate projects, the company provides planning, engineering and design services for public works projects and wireless telecommunications networks, according to the registration statement filed with the SEC.

Keith also offers mechanical, electrical, chemical and other industrial engineering services to improve automated and manufacturing processes, production lines and fire protection systems.

Net income totaled $532,000 during the first quarter of this year, up from $107,000 during the same period in 1998. Revenue rose to $8.97 million in the 1999 first quarter from $5.96 million one year earlier.

The company had $9.67 million of total debt on March 31, according to the filing. That figure would be $3.84 million assuming Keith held the IPO and used the proceeds as planned before March 31.

Aram Keith, 54, co-founded Keith in March 1983 and now serves as the company’s president and chief executive, according to the filing. Keith has been a California licensed civil engineer since 1972 and also holds civil engineering licenses in Arizona, Colorado, Nevada and Texas.

Underwriters for the stock sale will include First Security Van Kasper and EOffering Corp.

Keith will seek to have its shares trade on the Nasdaq market under the symbol TKCI.