Online motorcycle marketplace RumbleOn has completed the acquisition of two companies Wholesale and Wholesale Express, for an aggregate consideration of $16m in cash.
The deal also includes the consideration of 1,317,329 in shares of RumbleOn Series B Preferred Stock.
RumbleOn founder, chairman and CEO Marshall Chesrown said: “Wholesale accelerates our plan to enter the huge automobile marketplace and allows us to do it with meaningful size and scale, without the significant investments typically associated with new market entries.
“The combined company will benefit from RumbleOn’s powerful technology platform which will allow us to quickly ramp acquisitions direct from consumers and grow retail sales to consumers both of which drive margin expansion.
“In addition, we will have multiple opportunities to leverage our marketing efforts across the platform. Our CFO, Steve Berrard, and I have deep experience in the automotive sector and we are highly confident that the addition of Wholesale to the RumbleOn platform will provide significant opportunities to drive shareholder value. We look forward to providing more detail and updates on our progress in the near term.”
The company has also closed a $21.6m private placement of its Class B common stock priced at $7.10 per share and the expansion of its existing credit facility by $5m.
These proceeds will be used to fund the acquisitions of the two entities and the remaining balance for working capital.
Having been in business for over 27 years, Wholesale is an independent distributor of pre-owned vehicles in the US. It buys and sells approximately 2,000 vehicles per month to dealers and consumers nationwide.
This year, Wholesale is expected to sell more than 21,000 vehicles.