Ritchie Bros. auctioneers will acquire IAA — a business that specializes in selling total-loss, damaged and low-value vehicles — for $7.3 billion in stock and cash, including the assumption of $1 billion in debt.
The transaction, which will give Ritchie Bros. stockholders 59% of the combined company, has been unanimously supported by both boards.
“IAA accelerates our journey to become the trusted global marketplace for insights, services, and transaction solutions,” Ritchie Bros. CEO Ann Fandozzi said in a press release. “Their highly complementary business in an adjacent vertical will allow us to unlock additional growth. Through our trusted brands, similar operating model, and complementary services, we expect to drive efficiencies and create a more resilient business.”
She will serve as CEO of the combined company.
“Together, IAA and Ritchie Bros. will have expanded global operations, accelerating international buyer development and enhancing ancillary services such as transportation and finance,” said IAA president and CEO John Kett. “Very appealing new opportunities are ahead for IAA employees and new capabilities for customers as we enter this exciting new chapter with Ritchie Bros.”
$14.5 billion in transactions
Kett and three other IAA board members will join the Ritchie Bros. board, while Ritchie Bros. chairman Erik Olsson will serve as board chairman for the combined company.
The two companies’ product offerings recorded $14.5 billion in gross transaction volumes in the last 12 months.
IAA has 210 facilities across the U.S., Canada and Europe, adding to Ritchie Bros.’ 40 owned and 24 leased facilities.
The combined companies expect to realize $100 to $120 million in cost synergies by the end of 2025, largely by consolidating back office, finance and technology, general and administrative tasks, and operations.
Ritchie Bros. will remain incorporated in Canada and will retain offices in Burnaby, B.C. IAA’s Chicago office will serve as official headquarters for the combined company.
The transaction is expected to close in the first half of 2023, subject to various approvals.