RumbleOn has announced the pricing of $30 million aggregate principal amount of 6.75% convertible senior notes due 2024 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. In addition, RumbleOn today announced the pricing of a private placement, pursuant to Regulation D under the act, of 1,900,000 shares of its Class B Common Stock at a price of $5 per share.
The offerings are expected to close on May 14 subject to customary closing conditions, and are expected to result in aggregate net proceeds of approximately $36.4 million, after deducting the initial purchaser’s discounts and commissions, placement agent fees and estimated offering expenses. Neither offering is contingent upon the closing of the other offering.
The notes will be senior unsecured obligations of RumbleOn, and interest of 6.75% per year will be payable semi-annually in arrears on May 1 and Nov. 1 of each year, beginning on Nov. 1. The notes will mature on May 1, 2024, unless repurchased, redeemed or converted in accordance with their terms prior to such date.
RumbleOn expects to use approximately $11.1 million of the net proceeds from the offerings to refinance certain outstanding restrictive indebtedness and the remainder for other general corporate purposes, which may include increased spending on marketing and advertising, and expenditures necessary to grow the business. Pending these uses, RumbleOn may invest the net proceeds in short-term interest-bearing investment grade instruments.
