Transaction involved lock-up extension by largest stockholders and was well-received by leading public investors
SANTA MONICA, Calif., Nov. 18, 2014 (GLOBE NEWSWIRE) -- TrueCar (Nasdaq:TRUE), the negotiation-free car buying and selling platform, today announced that it has successfully closed its previously announced follow-on public offering of common stock. The offering, which raised $125.2 million in gross proceeds, totaled approximately 7.4 million shares, increased the public float by over 80% and expanded TRUE's institutional shareholder base.
"Over the last two decades, I've closed on dozens of financings but this one mattered most to me," said Scott Painter, TrueCar's Founder and CEO. "We focused on recruiting a strong and committed base of new shareholders."
The offering was composed of 5,402,601 shares offered by selling stockholders as well as 1,960,390 primary shares issued by TrueCar.
"With the $31.7 million of net proceeds from the sale of primary shares, TrueCar now has approximately $140 million of cash on our balance sheet," said Mike Guthrie, TrueCar's Chief Financial Officer. "We have never been more liquid."
TrueCar's largest shareholder, United Services Automobile Association (USAA), sold 3 million shares in the offering. The proceeds from this sale returned to USAA all of the capital it had invested in TrueCar. USAA remains the largest shareholder in TrueCar and its remaining equity position is valued at approximately $250 million based on the closing price on November 17.
"I was deeply gratified that we were able to fully return the capital investment of our largest stockholder, USAA, on the sale of a fraction of their holdings in the company," Painter said. "As a veteran myself, I found it meaningful to be able to achieve this milestone on the Veteran's Day holiday. We are honored by our long-term partnership with USAA and look forward to an ongoing, mutually beneficial relationship."
TrueCar's three largest shareholders - USAA, Upfront Ventures and Capricorn, who collectively control approximately 43% of shares outstanding after the offering, locked up their shares for 120 days as part of this transaction. That signal of support for TrueCar was important both for existing investors and for new investors building positions in TrueCar for the first time. All other selling shareholders, as well as TrueCar's directors and officers, signed customary 90 day lock-ups, subject to certain specified exceptions, as part of this transaction.
TrueCar's shares performed well during the marketing period. The shares were trading at $16.62 upon the launch of the roadshow and the transaction priced at $17.00.
"It was a very successful second trip to the capital markets for TrueCar," said Guthrie. "We achieved our key objectives in the transaction, including managing the expiration of the IPO lock-up, increasing our public float and attracting new institutional investors to support our company. We are grateful for the ongoing support from USAA and our other large shareholders."
J.P. Morgan Securities LLC and Goldman, Sachs & Co. acted as lead book-running managers for the offering, and Morgan Stanley & Co. LLC and RBC Capital Markets, LLC acted as book-running managers for the offering. JMP Securities LLC and Cowen and Company, LLC acted as co-managers.
The offering was made only by means of a prospectus, copies of which may be obtained from: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone: (866) 803-9204; or Goldman, Sachs & Co., Prospectus Department, 200 West Street, New York, NY 10282, telephone: (201) 793-5170, or by emailing prospectus-ny@gs.com.
A copy can also be found on the investor relations section of our website at http://ir.true.com/sec.cfm
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.