Ritchie Bros. Announces $500 Million Investment from Starboard Value

Ritchie Bros. Auctioneers Incorporated (NYSE: RBA) (TSX: RBA) today announced that 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.

In connection with the investment, Starboard Chief Executive Officer Jeffrey Smith will be appointed to the Ritchie Bros. Board of Directors effective following the later of the required approvals by Ritchie Bros. shareholders and IAA shareholders in connection with the company’s pending acquisition of IAA, Inc. (the “IAA transaction”).

“We welcome Starboard’s strategic investment in Ritchie Bros., which we believe will provide us with additional financial flexibility,” said Ann Fandozzi, CEO of Ritchie Bros. “Starboard shares our belief in the potential of the combination of Ritchie Bros. and IAA. We look forward to benefitting from Jeff’s expertise and working together as we complete this transaction, which we believe will deliver significant value to all our shareholders.”

“We are excited to become a shareholder of Ritchie Bros. as they take this important next step to accelerate the company’s transformation and value-creation trajectory,” said Mr. Smith. “We were investors in IAA’s parent company prior to its spinout, so we know IAA well and are strong believers in the fundamentals of the business and the market opportunities that this transaction creates. We believe that, with Ritchie Bros.’ leadership expertise, marketplace investments, yard footprint and comprehensive suite of solutions, they will be able to accelerate growth in each vertical. We are eager to work with the Ritchie Bros. team to ensure that the combined company executes on the significant synergy and growth opportunities outlined by Ritchie Bros. in today’s investor presentation.”

Terms of Agreement

Under the terms of the securities purchase agreement, Starboard has agreed to purchase $485 million of newly issuable senior preferred shares of Ritchie Bros., convertible into common shares with an initial conversion price of $73.00 per share, representing a premium of approximately 23% over Ritchie Bros.’ volume-weighted average price over the 10 trading day period ending on January 20, 2023. The preferred shares will carry an initial 5.5% preferred dividend, which is payable in cash or in shares at the company’s option, and will also be entitled to participate on an as-converted basis in the company’s regular quarterly common share dividends.

Concurrently, Starboard has also agreed to purchase approximately $15 million of common shares in Ritchie Bros. at a purchase price of approximately $59.72 per share.

The shares underlying Starboard’s investment will not be voted at the Special Meeting of Ritchie Bros. Shareholders to be held with respect to the IAA transaction.

In the event that the merger between Ritchie Bros. and IAA is terminated, the company will have the right to redeem the preferred shares at a redemption price of 102% of par plus accrued and unpaid dividends.

The completion of the investment by Starboard remains subject to the satisfaction of customary closing conditions, including the filing of articles of amendment for the senior preferred shares, the TSX’s acceptance of the proposed terms of the investment, approval of the listing of the common shares on the NYSE and TSX, and receipt of customary closing deliverables.

Additional information regarding the investment will be available on the Form 8-K to be filed by Ritchie Bros. with the SEC and on SEDAR and which will be available on the investor relations section of Ritchie Bros.’ 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, Mr. Smith was a Partner Managing Director of Ramius LLC, a subsidiary of the Cowen Group, Inc., and the Chief Investment Officer for the funds that comprised the Value and Opportunity investment platform. Mr. Smith was also a member of Cowen’s Operating Committee and Cowen’s Investment Committee. Prior to joining Ramius in January 1998, he served as Vice President of Strategic Development and a member of the Board of Directors of The Fresh Juice Company, Inc. Mr. Smith began his career in the Mergers and Acquisitions department at Société Générale. Mr. Smith is currently the Chair of the Board of Papa John’s International, Inc and on the Board of Cyxtera Technologies, Inc. Mr. Smith was formerly Chair of the Boards of Starboard Value Acquisition Corp., Advance Auto Parts, Inc., Darden Restaurants, Inc. and Phoenix Technologies Ltd. and formerly a member of the Boards 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 the Fresh Juice Company. Mr. Smith graduated from The Wharton School of the University of Pennsylvania, where he received a B.S. in Economics.


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

About Ritchie Bros.

Established in 1958, Ritchie Bros. (NYSE and TSX: RBA) is a global asset management and disposition company, offering customers end-to-end solutions for buying and selling used heavy equipment, trucks and other assets. Operating in a number of sectors, including construction, transportation, agriculture, energy, mining, and forestry, the company’s selling channels include: Ritchie Bros. Auctioneers, the world’s largest industrial auctioneer offering live auction events with online bidding; IronPlanet, an online marketplace with weekly featured auctions and providing the exclusive IronClad Assurance® equipment condition certification; Marketplace-E, a controlled marketplace offering multiple price and timing options; Ritchie List, a self-serve listing service for North America; Mascus, a leading European online equipment listing service; Ritchie Bros. Private Treaty, offering privately negotiated sales; and sector-specific solutions GovPlanet, TruckPlanet, and Ritchie Bros. Energy. The Company’s suite of solutions also includes Ritchie Bros. Asset Solutions and Rouse Services LLC, which together provides a complete end-to-end asset management, data-driven intelligence and performance benchmarking system; SmartEquip, an innovative technology platform that supports customers’ management of the equipment lifecycle and integrates parts procurement with both OEMs and dealers; plus equipment financing and leasing through Ritchie Bros. Financial Services. For more information about Ritchie Bros., visit RitchieBros.com.