Ritchie Bros. Announces a Large Acquisition Alongside Third-Quarter Earnings

On Nov. 7, Ritchie Bros. announced its acquisition of IAA Inc. for approximately $7.3 billion. The company is set to pay $10 per share in cash and is also planning to issue stock to IAA shareholders (0.5804 shares for each IAA share). Management expects the transaction to close in the first half of 2023 pending shareholder and regulatory approval. This move marks Ritchie Bros.' expansion into the adjacent auto salvage market. Recall the company has primarily focused on commercial assets (heavy machinery) to this point. We believe this shift is what led to the market's negative reaction after the deal was announced (stock was down nearly 18%).