Ritchie Bros. Secures $500M Strategic Investment From Starboard; Raises Cash Payout In IAA Proposal - RB

Ritchie Bros. Auctioneers Inc (NYSE:RBA) has changed the terms of its acquisition proposal of IAA Inc (NYSE:IAA), increasing the cash consideration to IAA shareholders.
Under the terms of the amended agreement, IAA shareholders will receive $12.80 per share in cash and 0.5252 common shares of Ritchie Bros. for each share of IAA common stock they own.
The change in consideration mix represents a shift in the cash/stock mix to approximately 29% cash/71% stock from the previous mix of 22% cash/78% stock.
The amended agreement has been unanimously approved by each company's Board of Directors.
Also, Ritchie Bros. Board of Directors expects to approve the issuance of a one-time special dividend to Ritchie Bros. shareholders of $1.08 per common share.
In November 2022, Ritchie Bros. agreed to acquire IAA in a stock and cash transaction valued at $7.3 billion, including $1.0 billion net debt.
"We are pleased to have reached an amended agreement with IAA, which reflects feedback we've received from shareholders regarding the best structure for the transaction," said CEO Ann Fandozzi.
In addition, Ancora Alternatives has agreed to vote its shares, representing 4% of IAA's voting power, in favor of the revised transaction. Tim O'Day is expected to be appointed to the Ritchie Bros. Board as one of the four IAA board designees.
Strategic Investment: In a separate release issued this morning, Ritchie Bros. announced that it has entered into a securities purchase agreement with Starboard Value LP.
Starboard will make a concurrent $485 million convertible preferred equity and $15 million common share investment in Ritchie Bros.
Starboard is fully supportive of the acquisition of IAA by Ritchie Bros., however, Starboard's investment will not vote at the Special Meeting of Shareholders.
In connection with the investment, Starboard CEO Jeffrey Smith will be appointed to the Ritchie Bros. Board.
Price Action: RBA shares are trading higher by 2.79% at $61.85 and IAA is up 6.59% at $43.33 on the last check Monday.

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