Lazydays Holdings has announced that two of its institutional investors have acquired more than 1 million shares of the company’s stock, generating about $11.3 million for the dealership group, which it says it will use the money to fund its geographic expansion plans.
The institution investors acquired the stock through a 2018 private investment public equity (PIPE) transaction, which allows preferred buyers to buy a publicly traded stock at a price below the current market value of the stock. In this particular case, the two institutional investors had acquired 1,005,308 shares of the company’s common stock for cash, with cash proceeds to Lazydays of about $11.3 million. Lazydays agreed to a discount of about 2 percent off the original warrant exercise price of $11.50 per share.
“This cash exercise of warrants further strengthens Lazydays already strong balance sheet and provides additional funding for us to continue aggressively executing our geographic expansion strategy,” said Nicholas Tomashot, CFO for Lazydays, adding, “In these two cases, we were motivated to give a slight discount to the exercise price because it has a similar dilutive impact as the cashless exercise of warrants, but generates significant cash we can use for growth.
“We believe the cash generated from this exercise of warrants, combined with our current cash reserves, the cash generated by our strong business performance and our planned expansion of our credit facility led by M&T Bank, provide adequate liquidity and capital to continue to execute our geographic expansion strategy for a significant period of time without relying on access to additional equity capital,” Tomashot added.
Lazydays currently operates eleven dealerships in Florida (2), Colorado (2), Arizona (2), Minnesota (1), Tennessee (2), and Indiana (2); and operates a dedicated service center location near Houston. It recently announced its intent to add a second dealership location in Monticello, Minn., acquire Chilhowee RV Center near Knoxville, Tenn., acquire Sprad’s RV in Reno, Nev., and open dedicated Airstream locations in Ramsey, Minn., and Knoxville and Nashville, Tenn.
