RideNow repositions financially after adopting FTC-compliant pricing
RideNow Group announced it has received a $220 million loan from affiliates of Centerbridge Partners, L.P., which it will use to satisfy an existing loan, push back the loan maturity date, and give the company more financial freedom as it adjusts to its new FTC-compliant pricing model.
“Extending our debt maturity to 2031 eliminates near-term maturity risks and significantly enhances our financial flexibility,” says chairman and CEO Michael Quartieri.
In RideNow’s Q2 financial report, Quartieri emphasized that completing the company’s refinancing was the immediate priority, and once that process was completed, RideNow would resume dealership acquisitions.
Additionally, RideNow is working on a deal with Wells Fargo Bank for a $50 million asset-based lending credit facility. That loan, which bears a lower interest rate than the Centerbridge loan, would help pay down the $220 million refinancing.
The ABL facility is expected to replace the used floorplan facility currently in place with Wells Fargo.
“The addition of an ABL facility with Wells Fargo in the near term will provide the company with additional financial flexibility as we move forward,” Quartieri says.
Quartieri says the financial restructuring is to achieve “operational excellence and execution of long-term growth.” Ultimately, a response to the adoption of its “Clear Price” FTC-compliant pricing model, which he says had a short-term negative impact on its August financial results.
The National Powersports Dealers Association addressed FTC-compliant pricing in April. The association called on manufacturers to rethink how they price units and warned that current practices are putting dealers at risk under new federal pricing transparency rules.
