Ritchie Bros completes $7 billion IAA acquisition

(Reuters) -Canada’s Ritchie Bros Auctioneers Inc said on Monday it had completed the acquisition of U.S. auto retailer IAA Inc, weeks after two proxy advisory firms urged shareholders to reject the $7 billion deal.

The company, which auctions and sells used heavy industrial equipment, last week saw its shareholders vote in favor of the acquisition despite the pushback from Institutional Shareholder Services and Glass Lewis.

The proxy advisory firms on March 6 recommended that shareholders reject the deal due to potential risks including a lag in IAA’s performance and a drop in stock price since the bid was announced in November.

Under terms of the transaction, IAA shareholders would get $12.80 per share in cash and 0.5252 common shares of Ritchie Bros for each share of IAA common stock they own.

Ritchie Bros in January sweetened the cash component of its buyout offer for IAA Inc by 28%, valuing the U.S. auto retailer at $5.94 billion, and also secured the backing of a key IAA shareholder which had questioned the initial offer.

With the deal having closed, Ritchie Bros shareholders hold 62.8% of the combined company and IAA stockholders own the rest.

IAA’s common stock ceased trading on the New York Stock Exchange under the ticker symbol “IAA” as of the close of trading on March 20.

(Reporting by Priyamvada C in Bengaluru; Editing by Devika Syamnath)