Rubicon selling fleet technology business, issuing preferred equity to Rodina Capital

Rubicon Technologies Inc., Lexington, Kentucky, has sold its fleet technology business and issued convertible preferred stock in Rubicon to Rodina Capital, a private investment firm based in Florida.

The total transaction value is $94.2 million, which includes upfront cash and an earnout consideration of $74.2 million payable in 2024 and a $20 million issuance of convertible preferred stock. Rubicon says an independent special committee of its board of directors and its board of directors have approved the transactions.

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In a news release, Rubicon, which provides technology solutions for waste, recycling and fleet operations, says these transactions will ensure the company’s long-term viability, improve its balance sheet by reducing debts and provide additional liquidity to enable it to quickly achieve its business objectives, accelerate its journey to profitability in the short term and continue its long-term growth. The fleet technology business unit will now operate as a private software company under a new name, which will be announced soon.

“Importantly, it marks a return to Rubicon’s core principles, a business centered on a customer-focused approach that has been instrumental in the company’s growth from the outset,” the company says. “This strategic move underscores Rubicon’s dedication to the RubiconConnect product, which serves commercial waste generators from small to medium-sized businesses to Fortune 500 companies.”

Rubicon adds that many of its commercial customers are looking to its products to help them achieve sustainability goals with tailored zero waste and circular economy solutions, including through the company’s recently launched technical advisory services (TAS). this sale and the new capital will be dedicated to improving services and strengthening its longstanding relationship with more than 8,000 vendor and hauler partners—90 percent of which are small, independent businesses.

“Through these transactions, Rubicon has significantly strengthened its balance sheet, providing a substantial cash infusion into the business to allow us to achieve our ambitious goals,” Rubicon CEO Phil Rodoni says. “This marks a transformative moment for Rubicon, aligning with our strategic vision to lead our industry by innovating and investing in sustainable practices that meet the evolving needs of both our hauler network and customer base. We are excited to leverage this newfound financial agility to drive growth, enhance our competitive edge and deliver exceptional value to our shareholders and customers alike.”

Osman Ahmed, the lead independent director of Rubicon’s board of directors, called the sale transformational. “It not only gives the company the financial strength it requires to continue on its aggressive growth plan, it allows the management team to solely focus its time and efforts on Rubicon’s core business.”

The company’s fleet technology unit is a software as a service (SaaS) technology business that powers heavy-duty fleet operations in more than 100 cities, including the cities of Houston, Phoenix, Miami, Atlanta and Kansas City. Rubicon claims six of the top 10 cities by population use the RubiconSmartCity product to improve the safety and effectiveness of core municipal operations and save taxpayer dollars.

“We are thrilled to begin operating as an independent software company,” says Conor Riffle, senior vice president of Smart Cities at Rubicon. “This transaction allows us to focus all of our energy on our rapid growth, our incredible customer base and our innovations at the cutting edge of technology for the waste and recycling, snow removal and street sweeping markets. We are proud to partner with a family office that has a long-term view for the business and the financial resources to pursue exponential growth.”

Winston & Strawn LLP acted as legal advisor to Rubicon, and Cantor Fitzgerald & Co. served as the exclusive financial advisor to Rubicon during this transaction.