RumbleOn announced a trio of major developments during the past two weeks, including the pricing of its previously announced underwritten public offering, an acquisition and another partnership
The latest development from the e-commerce company whose mission is to simplify how dealers and customers buy, sell, trade or finance pre-owned vehicles through one online location arrived on Thursday. RumbleOn is offering 1,110,000 shares of its Class B Common Stock, par value $0.001 per share, at a price to the public of $5.55 per share.
In connection with the offering, the company has also granted the underwriters a 30-day option to purchase up to an additional 166,500 shares of Class B Common Stock offered in the public offering to cover over-allotments, if any.
National Securities Corp., a wholly owned subsidiary of National Holdings Corp., is acting as lead book-running manager for the offering. Craig-Hallum Capital Group. is acting as joint book-running manager for the offering.
RumbleOn explained that it intends to use the net proceeds from the offering for working capital and general corporate purposes, which may include purchases of additional inventory held for sale, increased spending on marketing and advertising and capital expenditures necessary to grow the business.
The offering is expected to close on Monday, subject to customary closing conditions.
The stock announcement comes on the heels of RumbleOn announcing that it acquired independent pre-owned vehicle distributor AutoSport-USA and that AutoSport president Scott Bennie has joined the RumbleOn management team.
Management indicated the acquisition is a continuation of RumbleOn’s unified growth strategy to acquire and redistribute pre-owned vehicle inventory to consumers and dealers through its online marketplace. The company highlighted AutoSport provides immediate access to new inventory, enhances access to the Florida market and further expands RumbleOn’s team of industry experts.
RumbleOn entered the automobile market through its acquisitions of Wholesale Inc. and Wholesale Express during the fourth quarter of 2018, and the acquisition of AutoSport is a continuation of its expansion plans in the automobile market.
The company believes that RumbleOn’s technology — combined with AutoSport’s established market presence and profitability — will drive margin expansion and growth through inventory acquired directly from consumers and retail sales.
In 2018, AutoSport delivered approximately $60 million in revenue, and RumbleOn expects the acquisition to be accretive to its full year 2019 earnings.
“We are committed to growing our business while maintaining the core competencies of RumbleOn — efficient vehicle acquisition and completely agnostic distribution,” said Marshall Chesrown, founder, chairman and chief executive officer of RumbleOn. “Both (chief financial officer Steve Berrard) and I have known Scott Bennie for a long time and greatly respect his deep understanding and previous success in the sector. RumbleOn and AutoSport have strong synergies across our business models and solutions, and we believe this acquisition scales our business by unlocking new inventory distribution relationships and improving our penetration of the Florida market.
“We will integrate RumbleOn’s technology across AutoSport’s operations, allowing us to acquire a wider range of inventory through our cash offer tool and redistribute that inventory to consumers and dealers through our 100-percent online platform,” Chesrown continued.
“We are executing on our plan to penetrate the automobile market and believe the AutoSport acquisition demonstrates our confidence in our growth strategy and commitment to delivering shareholder value,” Chesrown added
As previously mentioned and part of the acquisition, Bennie will join RumbleOn’s management team. He joins the company with more than 30 years of experience in the automotive industry.
The company highlighted Bennie established a valuable long-term partnership with Manheim in Orlando and West Palm Beach, Fla., which he will bring to RumbleOn.
“I am excited to join RumbleOn as we revolutionize the pre-owned vehicle market together,” Bennie said. “By combining RumbleOn and its technology with AutoSport’s pre-owned vehicle distribution business, we will be able to efficiently scale by effectively tapping into industry-leading logistical support, process improvements, and new ways to sell to customers.
We look forward to realizing our many valuable synergies as we overlay the RumbleOn technology and integrate the businesses,” he went on to say.
With the addition of Orlando and West Palm Beach, RumbleOn now has regional partnerships in 16 markets across the country:
—Daytona Beach, Fla.
—Kansas City, Kan.
—West Palm Beach, Fla.
Additional details about partnership in Greensboro
RumbleOn brought on the distribution, reconditioning and inspection partnership with Greensboro Auto Auction (GAA), an independent, dealer-exclusive auto auction.
“With its strategic location in the Southeast, a strong partnership with GAA brings an immediate benefit to our customers and demonstrates the viability of our capital-light network model,” Chesrown said.
“As we continue to expand our network throughout the country this year, we believe these mutually beneficial partnerships will enable us to reduce our average days to sale and improve the cost efficiency of logistics, while maintaining an unparalleled customer experience,” Chesrown continued.
Based in Greensboro, N.C., GAA is comprised of three facilities on more than 260 acres, all locally owned and operated by more than 850 employees. Every week, GAA offers more than 3,000 vehicles across 16 auction lanes.
“We are excited to announce our long-term partnership with RumbleOn,” GAA general manager Jerry Barker said.
“We’re always looking to work with innovative, disruptive companies like RumbleOn to increase our sales volume and customer offerings, which ultimately benefits the dealers that have come to rely on our services,” Barker went on to say.