Ritchie Bros. secures $500 million strategic investment from Starboard; Increase cash payment in IAA proposal

• Ritchie Bros. Auctioneers Inc. (NYSE: RBA) has amended the terms of its acquisition proposal of IAA Inc. (NYSE: LPN), increasing the cash consideration paid to IAA shareholders.

• Under the terms of the amended agreement, IAA shareholders will receive $12.80 per share in cash and 0.5252 shares of Ritchie Bros. common stock. for each share of IAA common stock they hold.

• The change in the composition of the consideration represents a change in the cash/equity mix to approximately 29% cash/71% equity from the previous combination of 22% cash/78% equity.

• The amended agreement was unanimously approved by the boards of directors of each company.

• In addition, the board of directors of Ritchie Bros. plans to approve the issuance of a one-time special dividend to shareholders of Ritchie Bros. of $1.08 per common share.

• In November 2022, Ritchie Bros. agreed to acquire IAA in a $7.3 billion equity and cash transaction, including net debt of $1.0 billion.

• “We are pleased to have entered into an amended agreement with IAA, which reflects feedback we received from shareholders regarding the best structure for the transaction,” CEO Ann Fandozzi said.

• Moreover, Alternatives to Ancora agreed to vote its shares, representing 4% of IAA’s voting rights, in favor of the revised transaction. Tim O’Day should be appointed to the board of directors of Ritchie Bros. as one of four members of the IAA Board of Directors.

• Strategic investment: In a separate press release published this morningRitchie Bros. announced that it has entered into a securities purchase agreement with Starboard LP value.

• Starboard will simultaneously invest $485 million in convertible preferred stock and $15 million in common stock in Ritchie Bros.

• Starboard fully supports the acquisition of IAA by Ritchie Bros., however, Starboard’s investment will not be voted on at the special meeting of shareholders.

• As part of the investment, Starboard CEO Jeffrey Smith will be appointed to the Ritchie Bros. Board of Directors.

• Price action: RBA actions are trading up 2.79% at $61.85 and IAA is up 6.59% at $43.33 when last checked on Monday.

The story continues

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