Ritchie Bros. Auctioneers (RBA) Announces $500 Million Strategic Investment from Starboard Value

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Ritchie Bros. Auctioneers Incorporated (NYSE: RBA) (TSX: RBA) (“Ritchie Bros.”) today announced that it has entered into a securities purchase agreement with Starboard Value LP and certain affiliates (together, “Starboard”). Announced. Starboard will simultaneously make his $485 million convertible preferred stock and his $15 million common equity investment in Ritchie Bros.

In connection with this investment, Starboard CEO Jeffrey Smith has requested that Ritchie Bros. shareholders and IAA shareholders approve any required approvals in connection with the pending acquisition of IAA, Inc. He was later appointed to the board of directors of Ritchie Bros. (“IAA Transactions”).

Anne Fanzzi, CEO of Ritchie Bros. We look forward to benefiting from Jeff’s expertise and working with him in completing this transaction. We believe this will create significant value for all shareholders. “

Mr Smith said: “We have invested in the IAA parent company before it spun out, so we know the IAA well and strongly believe in the fundamentals of the business and the market opportunity this transaction creates. Our leadership expertise, market investments, yard footprint and comprehensive suite of solutions will enable them to accelerate growth in each area. We look forward to working with the team at Ritchie Bros. to ensure the company is able to execute on important synergies and growth opportunities, as outlined by Ritchie Bros. in today’s investor presentation. “

Terms of contract

Under the terms of the securities purchase agreement, Starboard has agreed to purchase $485 million of newly available senior preferred stock of Ritchie Brothers. It is convertible into common stock at an initial conversion price of $73.00 per share, representing an approximately 23% premium to Ritchie Bros. Brothers’ volume weighted average price for his 10 trading day period ending 20 January 2023. Preferred stock includes his initial 5.5% preferred dividend. This preferred dividend will be paid in cash or in shares at the company’s option, and will also give you the right to participate. Converted basis of the company’s regular quarterly common stock dividend.

Concurrently, Starboard agreed to purchase Ritchie Bros. common stock for approximately $15 million at approximately $59.72 per share.

The underlying shares of Starboard’s investment will not be voted on at a special meeting of Ritchie Bros. stockholders held in connection with the IAA transaction.

Upon completion of the Ritchie Bros.-IAA merger, the company will have the right to redeem the preferred stock at a redemption price of 102% of par value plus unpaid dividends.

Closing of Starboard’s investment is subject to customary closing conditions, including submission of preferred stock amendments, TSX’s acceptance of the proposed investment terms and approval of the listing of its common stock on March 20, 2018 subject to Receive NYSE and TSX and regular closing deliverables.

Additional information about the investment is available on Form 8-K and SEDAR filed by Ritchie Bros. with the SEC and is available on the Ritchie Bros. Investor Relations section. website.

About Jeffrey Smith

Jeffrey Smith is a Managing Member, Chief Executive Officer and Chief Investment Officer of Starboard Value LP. Prior to founding Starboard Value LP, he was a partner of Ramius LLC, a subsidiary of Cowen Group, Inc. He was Managing Director and Chief Investment Officer of the funds that make up the Value and Opportunity investment platform. . Mr. Smith was also a member of Cowen’s Steering Committee and Investment Committee. Prior to joining Ramius in January 1998, he served as Vice President of Strategy Development and a member of the Board of Directors of The Fresh Juice Company, Inc. Mr. Smith started his career in his M&A department at his Société Générale. Mr. Smith is currently the Chairman of the Board of Papa John’s International, Inc. and a member of the Cyxtera Technologies, Inc. Board of Directors. Mr. Smith previously served as Chairman of the Board of Starboard Value Acquisition Corp., Advance Auto Parts, Inc. and Darden. He is a member of Restaurants, Inc. and he is a member of Phoenix Technologies Ltd. Previously he was a member of the Board of Directors of Perrigo Company plc., Yahoo! Inc., Quantum Corporation, Office Depot, Inc., Regis Corporation, Surmodics, Inc., Zoran Corporation, Actel Corporation, Kensey Nash Corp., S1 Corp, and Fresh Juice Company. Mr. Smith graduated from the Wharton School of the University of Pennsylvania with a BA in Economics.


Goldman Sachs & Co. LLC acted as lead financial advisor and Guggenheim Securities, LLC acted as co-lead financial advisor in connection with the pending IAA acquisition and investment in Starboard. Evercore and RBC Capital Markets also acted as financial advisors to the company. Goodwin Procter LLP, McCarthy Tétrault LLP, and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Ritchie Bros.

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