Attached files
Exhibit 99.4
RumbleOn and RideNow Announce Definitive Agreement to Combine
Companies
Combination to Form the First Omnichannel Customer Experience in
Powersports in North America, Delivering an Unparalleled Solution
to Powersports Enthusiasts
● Transaction to Create
Dominant Publicly Traded Omnichannel Powersports Platform with a
Total Addressable Market of $100B+
● Pro Forma company sold more
than 63,000 vehicles in 2020, generating revenue of approximately
$1.3 billion, net income of approximately $65.3 million and
adjusted EBITDA of approximately $90.8 million.1 Business combination expected
to propel revenue growth and drive meaningful cost
synergies
● Technology-first platform offering
best-in-class customer experience; Powersports enthusiasts can
receive cash offers, buy, sell, trade or finance without leaving
their home
● $575.4 million RideNow purchase price to be
paid $400.4 million in cash and $175.0 million in RumbleOn Class B
common stock; Up to $280.0 million of cash consideration to be
funded via new debt financing committed by funds managed by Oaktree
Capital Management, L.P.
(“Oaktree”)
● Management of combined company to host a
conference call today, March 15, 2021, at 8:30am
ET
DALLAS,
TX & CHANDLER, AZ- RumbleOn, Inc. (NASDAQ: RMBL), an ecommerce
company using innovative technology to aggregate and distribute
pre-owned vehicles to and from both consumers and dealers, and the
nation’s largest powersports dealer, RideNow, today announced
they have entered into a definitive merger/equity purchase
agreement, creating the only omnichannel customer experience in
powersports and the largest publicly traded powersports dealership
platform. The integration of RideNow’s extensive footprint
and strong retail brand with RumbleOn’s technology platform
will transform the nation’s largest powersports dealer into
the first - and only - omnichannel powersports platform in North
America.
Together,
the combined company will have a dominant position in a $100+
billion market. The end-to-end platform will enable the combined
company to reach more consumers in a secularly growing – yet
still highly fragmented market, that is benefitting from changing
consumer behavior. The transaction is expected to propel revenue
growth and drive meaningful cost synergies, leading to improved
monetization and margin expansion.
Company Details and Strategic Rationale
●
Powersport vehicle
demand continues to experience significant growth, accelerated by
consumer lifestyle changes and advanced vehicle innovation, while
access to affordable pre-owned vehicles attracts new
riders.
●
The proposed
transaction combines a robust technology leader in online
acquisition and distribution of powersports vehicles with the
largest traditional brick and mortar retailer in
powersports.
●
RideNow is the
nation’s largest powersports retailer, with more than 40
full-service retail locations in 11 states across the country. In
2020, RideNow sold 45,527 powersport units, including ATVs, UTVs,
motorcycles, snowmobiles, and personal watercraft, generating
approximately $899.4 million in total revenue, $90.3 million in net
income and approximately $96.6 million in adjusted
EBITDA.
●
RumbleOn’s
ecommerce platform provides an efficient, timely and transparent
transaction experience, without leaving home. Whether buying,
selling, trading or financing a vehicle, RumbleOn offers dealers
and consumers a friction free experience - without geographic
boundaries.
●
The combined
company will offer the fastest, easiest and most transparent
transaction process available to consumers nationwide, which,
combined with proprietary pre-owned sourcing, disrupts the customer
search and purchase experience for powersports enthusiasts, both
online and in-store.
●
In addition to
driving organic growth by combining and scaling the legacy RumbleOn
and RideNow models, the combined company will be positioned to
further consolidate the
highly fragmented powersports industry.
●
RideNow’s
co-principal owners and co-founders Mark Tkach and William Coulter
will bring more than 70 additional years of combined experience in
the vehicle retail industry, joining RumbleOn’s executive
team, Marshall Chesrown, Steve Berrard, and Peter Levy, who have a
combined 80+ years of experience. Both Mr. Tkach and Mr. Coulter
will also join the RumbleOn Board of Directors at
closing.
Management Commentary
“We
are creating the only omnichannel solution in the powersports
industry – offering an unparalleled customer experience for
outdoor enthusiasts across the country. RideNow’s significant
physical retail platform provides the missing piece of a
‘bricks and clicks’ strategy for RumbleOn, enabling us
to reach consumers wherever they want to shop, whether online,
offline, or both,” said Marshall Chesrown, RumbleOn’s
Chief Executive Officer. “For us, this transaction is about
unlocking incremental sales, capturing additional monetization
opportunities such as parts and services, and consolidating a
fragmented industry to drive efficiency and improve the customer
experience. For our customers, this is about offering the most
robust selection of inventory through a simple, safe, hassle-free
and flexible experience nationwide,” concluded
Chesrown.
RideNow’s
co-principal owner and co-founder, Mark Tkach, commented, “We
are thrilled to be joining Marshall and the rest of the RumbleOn
team as we gear up to enable more consumers to shop with us through
the first omnichannel customer experience. We are excited to begin
leveraging both companies’ capabilities to expand our
combined offering. From adding financing options with RumbleOn
Finance to exploring the opportunity to open pre-owned retail
stores, RumbleOn’s technology and ecommerce presence will
provide us access to a nationwide audience and high demand
pre-owned inventory. Combining the proprietary technology platform,
online aggregation and distribution, nationwide logistics network
and the scale and physical footprint of these two companies will
give more powersport enthusiasts across the country access to our
robust inventory.”
Pro Forma Financials and Guidance
On a
pro forma basis the combined company would have generated
approximately $1.3 billion in revenue, $65.3 million in net income
and $90.8 million in adjusted EBITDA in 2020.
The
business combination is expected to close in the second or third
quarter of 2021. Given the highly complementary business models,
the Company expects to achieve cost synergies over time, while
driving incremental growth. For 2021, assuming a combination as of
January 1, 2021, total revenue is expected to be in the range of
$1.45-$1.55 billion and adjusted EBITDA in the range of
$100.0-$110.0 million. The companies expect to drive sustainable
long term revenue growth and strong unit economics, with a
long-term revenue target in excess of $5.0 billion and Adjusted
EBITDA margin target in excess of 10%.
2020
financial and pro forma information is based on unaudited financial
information of RideNow and RumbleOn. Pro forma financial
information is preliminary and does not include purchase accounting
adjustments. Audited historical financials and updated unaudited
pro forma information will be provided in future filings with the
SEC.
Transaction Details
Under the terms of the
definitive agreement, RumbleOn will combine with up to 46 entities
operating under the RideNow brand for a total consideration of up
to $575.4 million, consisting of $400.4 million of cash and
approximately 5.8 million shares of RumbleOn Class B Common Stock.
RumbleOn will finance the cash consideration through a combination
of up to $280.0 million of debt and the remainder through the
issuance of new equity. RumbleOn has entered into a commitment
letter with Oaktree to provide for the debt financing, subject to
certain conditions. The number of shares to be issued to RideNow is
subject to increase as described in the definitive agreement. The
transaction is subject to successful completion of the debt and
equity financing, RumbleOn stockholder approval, manufacturer
approval, other federal and state regulatory approvals, and other
customary closing conditions as described in the definitive
agreement.
Certain
RideNow minority equity holders are not initially parties to the
definitive agreement and some minority holders have rights of first
refusal (“ROFR”) with respect to the RideNow entity in
which they own a stake. If any of these equity holders either
decide not to sell their interests to the Company or to exercise
their ROFR, RumbleOn will not be able to acquire all of the equity
interests of the acquired companies, or in certain cases any
interests in an acquired company, and the consideration payable in
the business combination will be correspondingly reduced. RideNow
anticipates that all minority owners will participate in the
business combination and that no minority owners will exercise
their ROFR, but there is no assurance this will occur.
Upon
closing, the RideNow and RumbleOn executive teams will join their
combined 150+ years of vehicle retail experience. Each member of
the combined company senior management team will enter into three
year Executive Employment Agreements upon closing. Messrs. Tkach
and Coulter will also join the RumbleOn Board of
Directors.
RumbleOn
and RideNow expect to close the business combination during the
second or third quarter of 2021.
B. Riley Securities, a subsidiary of B. Riley Financial Inc., is
acting as exclusive financial advisor to RumbleOn and sole debt
placement agent in conjunction with the transaction.
Conference Call Details
Senior
management from RumbleOn and RideNow will host a conference call
today, Monday, March 15, 2021 at 8:30 a.m. ET. A live and archived
webcast can be accessed from RumbleOn's Investor Relations website
at https://investors.rumbleon.com/.
To access the conference call telephonically, callers may dial
(877) 407-9716, or (201) 493-6779 for callers outside of the United
States and entering conference ID 13716962.
About RumbleOn
Founded
in 2017, RumbleOn (NASDAQ: RMBL) is an ecommerce company using
innovative technology to aggregate and distribute pre-owned
automotive and powersport vehicles to and from both consumers and
dealers, 100% online. RumbleOn is disrupting the pre-owned vehicle
supply chain by providing dealers with technology solutions such as
virtual inventory, and a 24/7 distribution platform, and consumers
with an efficient, timely and transparent transaction experience,
without leaving home. Whether buying, selling, trading or financing
a vehicle, RumbleOn enables dealers and consumers to transact
without geographic boundaries in a transparent, fast and friction
free experience. For more information, please visit http://www.rumbleon.com.
About RideNow
Founded
in 1983, RideNow has grown into the largest powersports retailer
group in the United States through its dealership consolidation
strategy. RideNow compliments its vehicle sales with complete
parts, service, accessories, and after sales offerings. For more
information, please visit https://www.ridenow.com.
Additional Information about the Transaction and Where to Find
It
In
connection with the proposed business combination described herein
(the “Transaction”), RumbleOn intends to file relevant
materials with the SEC, including a preliminary proxy statement,
and when available, a definitive proxy statement. Promptly after
filing its definitive proxy statement with the SEC, RumbleOn will
mail the definitive proxy statement and a proxy card to each
RumbleOn stockholder entitled to vote at the meeting of
stockholders relating to the Transaction. INVESTORS AND
STOCKHOLDERS OF RUMBLEON ARE URGED TO READ THESE MATERIALS
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER
RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTION THAT RUMBLEON
WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT RUMBLEON, RIDENOW, AND THE
TRANSACTION. The definitive proxy statement, the preliminary proxy
statement, and other relevant materials in connection with the
Transaction (when they become available), and any other documents
filed by RumbleOn with the SEC, may be obtained free of charge at
the SEC’s website (www.sec.gov)
or by visiting RumbleOn's investor relations section at
www.rumbleon.com. The information contained on, or that may
be accessed through, the websites referenced in this press release
is not incorporated by reference into, and is not a part of, this
press release.
Participants in the Solicitation
RumbleOn
and its directors and executive officers may be deemed participants
in the solicitation of proxies from RumbleOn’s stockholders
with respect to the Transaction. A list of the names of those
directors and executive officers and a description of their
interests in RumbleOn will be included in the proxy statement
relating to the Transaction and will be available at www.sec.gov.
Additional information regarding the interests of such participants
will be contained in the proxy statement relating to the
Transaction when available. Information about RumbleOn’s
directors and executive officers and their ownership of
RumbleOn’s common stock is set forth in RumbleOn’s
definitive proxy statement for its 2020 Annual Meeting of
Stockholders filed with the SEC on July 29, 2020. Other information
regarding the interests of the participants in the proxy
solicitation will be included in the proxy statement relating to
the Transaction when it becomes available. These documents can be
obtained free of charge from the sources indicated
above.
RideNow
and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the stockholders
of RumbleOn in connection with the Transaction. A list of the names
of such directors and executive officers and information regarding
their interests in the Transaction will be included in the proxy
statement relating to the Transaction.
No Offer or Solicitation
This
report does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or
approval, by RumbleOn, nor shall there be any sale of the
securities in any state in which such offer, solicitation or sale
would be unlawful before the registration or qualification under
the securities laws of such state. Any offering of the securities
will only be by means of a statutory prospectus meeting the
requirements of the rules and regulations of the SEC and applicable
law.
Forward Looking Statements
Certain
statements made in this press release are “forward-looking
statements” within the meaning of the “safe
harbor” provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be identified by
the use of words such as “target,”
“believe,” “expect,” “will,”
“shall,” “may,” “anticipate,”
“estimate,” “would,”
“positioned,” “future,”
“forecast,” “intend,” “plan,”
“project,” “outlook”, and other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters. Examples of
forward-looking statements include, among others, statements made
in this press release regarding the proposed transactions
contemplated by the definitive agreement, including the benefits of
the Transaction, revenue opportunities, anticipated future
financial and operating performance, and results, including
estimates for growth, and the expected timing of the Transaction.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
management’s current beliefs, expectations, and assumptions.
Because forward-looking statements relate to the future, they are
subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict and many of which are
outside of RumbleOn's control. Actual results and outcomes may
differ materially from those indicated in the forward-looking
statements. Therefore, you should not rely on any of these
forward-looking statements. Important factors that could cause
actual results and outcomes to differ materially from those
indicated in the forward-looking statements include, among others,
the following: (1) the occurrence of any event, change, or other
circumstances that could give rise to the termination of the
Transaction; (2) the failure to obtain debt and equity financing
required to complete the Transaction; (3) failure to obtain the OEM
approvals; (4) the inability to complete the Transaction, including
due to failure to obtain approval of the stockholders of RumbleOn,
certain regulatory approvals, or satisfy other conditions to
closing in the definitive agreement; (5) the impact of COVID-19
pandemic on RumbleOn's business and/or the ability of the parties
to complete the Transaction; (6) the risk that the Transaction
disrupts current plans and operations as a result of the
announcement and consummation of the Transaction; (7) the ability
to recognize the anticipated benefits of the Transaction, which may
be affected by, among other things, competition, the ability of
management to integrate the combined company's business and
operation, and the ability of the parties to retain its key
employees; (8) costs related to the Transaction; (9) changes in
applicable laws or regulations; (10) risks relating to the
uncertainty of pro forma and projected financial information with
respect to the combined company; and (11) other risks and
uncertainties indicated from time to time in the preliminary and
definitive proxy statements to be filed with the SEC relating to
the Transaction, including those under “Risk Factors”
therein, and in RumbleOn's other filings with the SEC. RumbleOn
cautions that the foregoing list of factors is not exclusive.
RumbleOn cautions readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made.
RumbleOn does not undertake or accept any obligation or undertaking
to release publicly any updates or revisions to any forward-looking
statements to reflect any change in their expectations or any
change in events, conditions, or circumstances on which any such
statement is based, whether as a result of new information, future
events, or otherwise, except as may be required by applicable law.
Neither RumbleOn nor RideNow gives any assurance that after the
Transaction the combined company will achieve its
expectations.
Without
limiting the foregoing, the inclusion of the financial projections
in this press release should not be regarded as an indication that
RumbleOn considered, or now considers, them to be a reliable
prediction of the future results. The financial projections were
not prepared with a view towards public disclosure or with a view
to complying with the published guidelines of the SEC, the
guidelines established by the American Institute of Certified
Public Accountants with respect to prospective financial
information, or with U.S. generally accepted accounting principles.
Neither RumbleOn’s independent auditors, nor any other
independent accountants, have compiled, examined or performed any
procedures with respect to the financial projections, nor have they
expressed any opinion or any other form of assurance on such
information or its achievability. Although the financial
projections were prepared based on assumptions and estimates that
RumbleOn’s management believes are reasonable, RumbleOn
provides no assurance that the assumptions made in preparing the
financial projections will prove accurate or that actual results
will be consistent with these financial projections. Projections of
this type involve significant risks and uncertainties, should not
be read as guarantees of future performance or results and will not
necessarily be accurate indicators of whether or not such results
will be achieved.
Investor Relations:
The
Blueshirt Group
Dylan
Solomon
investors@rumbleon.com