Dive Brief:
- Digital waste brokerage company Rubicon Technologies announced it hired Eric Bauer as its new CFO. Bauer was previously CFO of Circulus, an LDPE recycling processor, from June 2023 to October 2024.
- The company also saw a change in its board. Two independent directors — Paula Dobriansky, a career diplomat, and Paula Henderson, a software executive — departed. The board added Mike Dulin, CEO of Circulus, and Jose Miguel Enrich, the company’s majority shareholder.
- In financial disclosures last week, the company revealed it had agreed to another preferred equity deal with Rodina Capital worth $20 million and created a new revolving debt facility. Rodina is associated with Enrich and Andres Chico, chairman of Rubicon’s board.
Dive Insight:
Rubicon has faced difficult financial circumstances this year, and a series of disclosures from the company suggest it may be headed toward a deal to go private. Rubicon went public two years ago via a special purpose acquisition but has struggled to maintain good financial standing since.
Rodina Capital and its affiliates have previously provided financing to Rubicon amid those challenges. The company sold its fleet technology business to Rodina earlier this year for $68 million, which Rodina in turn sold to Routeware. As part of that transaction, Rodina required Rubicon to initiate a sale process.
Rubicon has not held an earnings call since May, when it reported first quarter results. Its C-suite has seen a series of changes since, as CEO Phil Rodoni and CFO Kevin Schubert both departed in June. Bauer replaces interim CFO Grant Deans, who will remain at Rubicon as the company’s controller.
In a statement last week, interim CEO Osman Ahmed said the latest capital infusion from Rodina strengthened Rubicon’s financial position.
“On the back of our latest quarterly performance, these transactions will allow Rubicon to continue enhancing our partner-centric experience,” Ahmed said.
The company reported revenue of $169.3M, which was up 8.3% year over year in the third quarter, but gross profit was down 26.1%. That included an increase in revenue from services as well as a slight uptick in recyclable commodity revenue. The company had $1.35 million in cash on hand at the end of the quarter, which was prior to its latest financing deal with Rodina.
Financial incentives tied to a sale of Rubicon appear to still be pending. A Rodina affiliate made an offer to buy Rubicon earlier this year, which would result in a $2.5 million payout if Rubicon accepts by Dec. 31. In May, the company was given 300 days to agree to a sale or be forced to pay off several debts immediately. By September, Rubicon was expected to have entered into a binding letter of intent to sell the company, per financial disclosures from the company.
Rubicon declined to comment on the sale process.
Rodina’s buyout offer is subject to the agreement of a special committee of Rubicon's board of directors. Ahmed was previously lead independent director on the board. Besides Enrich, Chico and Ahmed, Rubicon's board of directors includes Barry Caldwell, a former WM executive; Brent Callinicos, a former Virgin Hyperloop executive; and Dulin.
As new CFO, Bauer's base salary will be $425,000 plus additional incentives. The company disclosed its hiring agreement with Bauer would occur "upon the consummation of the acquisition of the Company by Rodina Capital." It also noted that a proposed transaction between Rodina affiliates would not affect a long-term incentive plan included in Bauer’s contract.
