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RumbleOn, RideNow Announce Definitive Agreement to Combine Companies

RumbleOn, Inc. and RideNow 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.

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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 consolidatethe 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.”


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.

Links: RumbleOn, RideNow

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