Shareholders of Ritchie Bros. Auctioneers (RBA) have approved an acquisition of IAA, defying a last-minute request from a corporate co-founder and former president who wanted to scuttle the deal.
A special meeting of shareholders was held on March 14.
“We thank our shareholders for their confidence in the Ritchie Bros. team, our strategy and the significant value creation potential we can unlock through the Ritchie Bros. + IAA combination,” Ritchie Bros. CEO Ann Fandozzi said in a press release.
“We greatly value the varied perspectives that have been shared and the engagement we have had with our shareholders since announcing the IAA transaction.”
Co-founder David E. Ritchie and former president C. Russell Cmolik issued a public letter to shareholders before the vote, suggesting the merger with IAA would negatively affect the corporate culture.
They cited an analysis by Luxor Capital, which owns 3.6% of the auction house.
“By every indication for marketplace investors, IAA is a distinctly inferior business to RBA,” the letter said, citing things like a 25% drop in market share in the last six years. “IAA is not a ‘proven leader’ as stated by RBA’s management but instead a distant number two player across all key aspects of its business.”
While Ritchie Bros. management have cited the benefits of using IAA’s yards as satellite yards, Luxor believes the locations are overutilizes – leading to IAA’s inferior service levels and market share.
Ritchie Bros. has been a public company for 25 years.