(RTTNews) – Ritchie Bros. Auctioneers Incorporated (RBA, RBA.TO) and IAA, Inc. (IAA) have amended the terms of their merger agreement. IAA shareholders will receive $12.801 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.
Separately, Ritchie Bros. said it has entered into a securities purchase agreement with Starboard Value LP and certain of its affiliates pursuant to which Starboard will make a concurrent $485 million convertible preferred equity and $15 million common share investment in Ritchie Bros. Starboard CEO Jerey Smith will be appointed to the Ritchie Bros. Board effective following the later of the required approvals by Ritchie Bros. shareholders and IAA shareholders in connection with the pending acquisition of IAA.
Following the close of the IAA deal, on an as converted basis Ritchie Bros. shareholders will own approximately 59.1% of the combined company, IAA shareholders will own approximately 37.2% and Starboard will own approximately 3.7%.
Also, Ancora Holdings Group, LLC has agreed to vote its shares, representing approximately 4% of IAA’s voting power, in favor of the deal. Tim O’Day, operator and the current President and Chief Executive Officer of Boyd Group Services Inc., is expected to be appointed to the Ritchie Bros. Board upon the closing of the transaction.
The Ritchie Bros. Board expects to approve the issuance of a one-time special dividend to Ritchie Bros. shareholders in the amount of $1.08 per common share.