Shareholders of Ritchie Bros. Auctioneers Inc. approved the company’s deal to buy U.S. automotive salvage company IAA Inc. at a meeting Tuesday, the company said in a press release.
The vote capped months of criticism since the acquisition was announced in November.
Shareholders of IAA Inc. also approved the purchase, sealing the deal for an acquisition that required approval from shareholders in both companies.
Shares in Ritchie Bros., an auction company based in 91原创, were down more than two per cent mid-afternoon.
Ritchie Bros. CEO Ann Fandozzi thanked shareholders for their confidence, and said the firm looks forward to continuing their record of delivering on stakeholder commitments with IAA.
Several Ritchie Bros. shareholders had expressed concerns about the deal and had made it clear they planned to vote against it.
Shareholder advisory firms Glass Lewis and Institutional Shareholder Services had both recommended shareholders vote against the deal, while Egan-Jones recommended they vote yes.
In its report, Egan-Jones said it believes that IAA's business will complement Ritchie Bros.' strategic vision to position itself as a key player in the industry.
IAA is a digital marketplace that connects vehicle buyers and sellers.
The merger would support the company in relocating its headquarters to the U.S., Egan-Jones said.
ISS in its report noted that the acquisition was "one of the rare deals drawing opposition from shareholders of both the seller and the buyer" — that is, until the deal was revised, increasing the cash component of the deal and decreasing the equity exchange ratio.
After the revision, the situation became more polarizing, said ISS.
"This transaction has incited an unusually high number of public expressions of support and opposition, resulting in a heated, highly contentious, and occasionally personal, public debate not just of its merits, but of the motivations and biases of each involved party," the firm said.
Investment firms Luxor Capital Group LP and Janus Investment Investors both also voiced their opposition to the deal
Janus said it believed the deal would introduce an unnecessary level of risk to Ritchie Bros. shareholders.
The company offered US$12.80 per share in cash and 52.52 per cent of a Ritchie Bros. share for each IAA share (worth US$44.40 at the time of the announcement), and planned to pay a special one-time dividend of US$1.08 to its own shareholders if the deal passed.
In a press release, IAA Inc. said upon completion of the transaction, IAA shareholders will own approximately 37.2 per cent of the combined company, and Ritchie Bros. shareholders will own approximately 62.8 per cent.
The results are preliminary and the vote breakdown has not been released.
This report by The 91原创 Press was first published March 14, 2023.
Companies in this story: (TSX:RBA)
The 91原创 Press
