As part of its completion of its previously announced acquisition of Freedom Powersports, which represents 15 OEMs through 13 retail locations operated in Texas, Georgia, and Alabama, RumbleOn has named the new roles for former Freedom executives Kevin Lackey and Daniel Arriaga.
Lackey, the former Freedom CEO, will join the RumbleOn management team in the company’s Irving, Texas, headquarters as the president of Retail for all Freedom locations, reporting to CEO Marshall Chesrown.
Arriaga, an operational executive at Freedom, has been appointed regional director of all Freedom retail locations, reporting to Lackey. In his new role, Arriaga will continue to lead daily operations for Freedom and round out the company’s recently announced regional management structure.
The finalization of the Freedom acquisition expands RumbleOn’s national presence to over 55 locations. RumbleOn also affirmed its prior revised proforma combined company revenue outlook of $1.55 billion to $1.60 billion, and adjusted EBITDA outlook of $115.0 million to $120.0 million for full year 2021.
“We are transforming the powersports industry and remain singularly focused on offering unparalleled choice and unmatched experience to our customers both online and in our retail locations. The opportunity set and our business fundamentals remain strong. Adding Freedom to our portfolio further strengthens our consumer offering, expands our national footprint, and deepens our leadership position in powersports. We are more excited than ever about our future and are thrilled to officially welcome the Freedom team to the RumbleOn family,” Chesrown said.
“RumbleOn is reimagining and rebuilding the customer experience within the powersports industry,” Lackey said. “The company has already demonstrated the use of innovative technology to drive scale efficiencies across the entire value chain. On behalf of the entire Freedom team, we are thrilled to join RumbleOn on its mission to transform the powersports industry.”
The acquisition of Freedom Powersports, which included all business and real estate assets, subject to customary net working capital and indebtedness adjustments, closed on Friday, February 18, 2022, for an aggregate consideration of approximately $130.0 million. The aggregate consideration consisted of approximately $83.4 million for the Freedom business and approximately $46.6 million for acquired real estate properties, including the payoff of outstanding mortgage debt on the real estate assets in the aggregate amount of approximately $27.0 million. The aggregate consideration was paid using cash on hand, $84.5 million drawn from the company’s delayed draw term loan facility, and the issuance of 1,048,718 restricted shares of RumbleOn Class B common stock at a volume weighted average price of $29.45 per share. The restricted shares are subject to a six-month lock-up.
Freedom has a history of unit growth, revenue expansion and EBITDA profitability. Freedom recorded over $220.0 million of revenue and over $25.0 million of adjusted EBITDA for 2021 (unaudited).