Online powersports marketplace RumbleOn has agreed to shell out $23 million in cash and stock to buy preowned vehicle distributor Wholesale Inc. The acquisition marks RumbleOn’s first foray into the auto sector.
“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,” Marshall Chesrown, founder and chief executive of RumbleOn, said on a press release. “[Wholesale Inc.] 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.”
Independent distributor Wholesale Inc. sells preowned vehicles to consumers and dealerships. The company is headquartered in Nashville, Tenn., with retail stores in Madison and Mt. Juliet, Tenn. Wholesale Express is the company’s distribution service.
Wholesale has an inventory of 2,000 units, and its revenue is anticipated to be in the range of $625 million to $650 million for 2018, according to RumbleOn’s third-quarter earnings report.
On the heels of the acquisition, RumbleOn expects its revenue to skyrocket more 1,000% — to about $1 billion by the end of 2019 from about $80 million projected for 2018.
RumbleOn plans to add RVs and boats to its product offerings this quarter. Through the acquisition of Wholesale Inc., RumbleOn will now encompass all vehicle types with the goal of being the only nationwide online provider that allows for the buying, selling, trading, financing, and listing of any vehicle across all segments, according to the earnings report.