IAA Stock Moves as Ritchie Bros Acquires Company in $7.3 Billion Deal
IAA (NYSE:IAA) stock is on the move on Monday thanks to a massive acquisition deal with Ritchie Bros Auctioneers (NYSE:RBA).
Specifically, Ritchie Bros has agreed to acquire IAA in a deal worth $7.3 billion, which includes its assumption of $1 billion of debt. The offer includes $10 in cash and 0.5804 shares of RBA stock for each share of IAA stock.
It’s worth noting that this offer values shares of IAA stock at $46.88. That represents a roughly 19% premium to the stock’s closing price on Friday. It’s also a 23% premium to the shares’ 10-day volume-weighted average price.
John Kett, President and CEO of IAA, said the following about the news:
“Together, IAA and Ritchie Bros. will have expanded global operations, accelerating international buyer development and enhancing ancillary services such as transportation and finance […] The transaction will also provide compelling value to stockholders through the immediate cash component and the opportunity to participate in the substantial growth potential of our combined company with significant resources.”
More Details of the Deal
Leadership at Ritchie Bros Auctioneers will see some changes after the deal. Ritchie CEO Ann Fandozzi will continue to act as CEO of the combined company. However, changes to the board will be made. That includes adding four members to the board, one of which will be Kett.
The deal needs approval from regulators, as well as IAA stock shareholders, before it can close. If all goes well, the deal is expected to reach completion in the first half of 2023.
IAA stock is down 2.6% and RBA stock is down 20% as of Monday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.