A Kentucky company that got its start with a $10,000 line of credit more than a decade ago plans to go public in a deal that will result in a $2 billion valuation.
Rubicon Technologies LLC, which established Lexington as its headquarters earlier this year, has entered into a merger agreement with Founder SPAC, a special purpose acquisition company. The deal, which will result in a combined enterprise value of about $1.7 billion at a price of $10 per share, is expected to close in the second quarter of 2022, according to a news release.
Nate Morris, a Louisville native, founded the software company in 2008. It provides smart waste and recycling solutions to businesses and governments worldwide, including big clients such as Apple, Walmart, Starbucks, Chipotle and FedEx.
Rubicon had more than $500 million in revenue in 2020, and annual revenue is expected to exceed $577 million in 2021. The SPAC merger will result in gross proceeds of approximately $432 million to Rubicon, which will list on the New York Stock Exchange under the ticker symbol "RBT."
Here's what Morris had to say about the transaction:
“Historically, waste has been an overlooked issue but in Rubicon we have built a different kind of company, one that has sought to address the entrenched shortcomings of the industry and bring the issue of waste into the public consciousness. As a Lexington, Kentucky-based company, our proven track record of environmental innovation shows that transformational ideas can come from anywhere, and demonstrates the power of forward-thinking businesses to drive positive change in our world. This transaction reflects a transformative step in our company’s long, successful track record. While the waste and recycling category is highly resilient, it is ripe for improvements in efficiency and sustainability, and the successful execution of our growth strategy will help propel the industry into the current age of digitization while facilitating the broader sustainability goals of customers and communities around the world. In doing so, we are creating a new standard for the waste and recycling category.”
The transaction positions Rubicon to capitalize on future growth from organic and inorganic opportunities, as well as continued investment in new software development.
In the release, Osman Ahmed, CEO of Founder SPAC, said the main thesis behind Founder SPAC was to partner with an "iconic company enabling digital transformation in a significant end market."
"Nate is a visionary CEO who has driven innovation in one of the toughest categories in the business world, delivering value to Rubicon’s hauling and recycling partners and the customers they serve," Ahmed said. "Under his leadership, Rubicon has achieved significant scale with marquee customers while delivering industry-leading growth, strong customer retention, and a clear path to profitability."
In an investor call Thursday morning, Rubicon Chief Financial Officer Jevan Anderson said the company is forecasting revenues of $736 million in 2022 and about $1.15 billion in 2023. It's estimating net revenues of about $45 million in 2021, approximately $77 million in 2022 and $181 million in 2023.
