RBA - Ritchie Bros. to acquire IAA in $7.3B stock and cash deal

Ritchie Bros. Auctioneers ( NYSE: RBA ) has agreed to acquire IAA ( NYSE: IAA ) in a stock and cash transaction valued at approximately $7.3B.

Pursuant to the deal, IAA stockholders will receive $10.00 in cash and 0.5804 shares of Ritchie Bros. ( RBA ) common stock for each share of IAA common stock they own.

The transaction, which has unanimous support of both boards of directors, is expected to close in the first half of 2023. Ritchie Bros. ( RBA ) plans to fund the cash consideration of the deal through a combination of cash on hand and new debt.

The purchase price of $46.88/share represents a premium of ~19% to the closing share price of IAA common stock on Nov. 4, 2022,

IAA is a global digital marketplace connecting vehicle buyers and sellers. The deal creates a global marketplace for commercial assets and vehicles with pro forma GTV of ~$14.5B for the year ended Sep. 30, 2022. It is expected to be accretive to Ritchie Bros.'s ( RBA ) adjusted earnings per share by low single digits in the first full year following the transaction close and mid-teens accretive after that.

Ann Fandozzi will continue to serve as CEO of the combined company.

Ritchie Bros Auctioneers ( RBA ) is scheduled to announce Q3 earnings results today before market open.

The consensus EPS Estimate is $0.38 (-13.6% Y/Y) and the consensus Revenue Estimate is $366.23M (+11.1% Y/Y).

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