RumbleOn receives $400 million commitment for RideNow merger

Chicago, March 15 – RumbleOn, Inc. has received a $400 million commitment letter from Oaktree Capital Management, LP for the upcoming announced merger with RideNow, according to an 8-K filing with the Securities and Exchange Commission.

Oaktree has committed to provide a $400 million credit facility comprised of a $280 million initial advance and an additional $120 million delayed-draw term facility.

The interest rate on the five-year facility will be Libor plus 825 basis points, of which 100 bps will be payable in kind.

The facility will need to be prepaid with the proceeds of certain events including 50% of excess cash flow, 100% of certain asset sales, 100% of proceeds of certain debt issuances and 50% of certain equity financings.

The company is also issuing to Oaktree warrants for class B common stock in lieu of a commitment fee.

If issued at closing, Oaktree will be able to buy a number of shares equal to $40 million divided by the lowest price per share at which equity is issued in connection with financing the transaction.

The warrants will be exercisable immediately after closing, five days after the termination of the commitment letter and will expire 18 months after either of those two events.

RumbleOn and its subsidiary NextGen Pro LLC have also executed a $2.5 million bridge loan with BRF Finance Co., LLC, an affiliate of B. Riley Securities, Inc. The loan matures either on Sept. 30 or before that date upon the issuance of debt or equity above a certain threshold.

RumbleOn is combining with up to 46 entities operating under the RideNow brand for a total consideration of up to $575.4 million, consisting of $400 million in cash and approximately 5.8 million shares of RumbleOn class B common stock. Financing for the cash part of the purchase is expected to come through $280 million of debt and the remainder through the issuance of new equity.

The business combination is expected to close during the second or third quarter of 2021.

B. Riley Securities is the exclusive financial adviser to RumbleOn and debt placement agent in conjunction with the transaction.

RumbleOn provides an e-commerce platform that facilitates consumers and dealers to buy, sell, trade and finance pre-owned recreation vehicles. RideNow is the nation’s largest powersports retailer.

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