Ritchie Bros. To Buy IronPlanet For About US$758.5 Mln

(RTTNews) - Ritchie Bros. Auctioneers Inc. (RBA, RBA.TO) said that it agreed to acquire IronPlanet, online marketplace for used heavy equipment and other durable asset sales, for about US$758.5 million, subject to customary closing adjustments.

The transaction is expected to be accretive to earnings within the first year, excluding transaction costs, and significantly bolster growth in Gross Auction Proceeds, revenue and earnings over the long term.

As per the terms of the transaction, Ritchie Bros. will acquire 100% of the equity of IronPlanet for approximately US$740 million in cash and the assumption of unvested equity interests in IronPlanet, subject to adjustment, that brings the total transaction value to approximately US$758.5 million.

Ritchie Bros. intends to finance the transaction through a combination of cash on hand and new debt, and has bridge financing commitments from Goldman Sachs Bank USA subject to customary terms and conditions to facilitate the transaction close.

Ritchie Bros. has secured employment agreements with key executives, who will supplement the strength of Ritchie Bros.' global management team. Mr. Owens has agreed to join the combined company's executive committee upon closing.

The transaction was approved by the Boards of Directors of both companies and is expected to close by the first half of 2017, subject to regulatory clearances and the satisfaction of other customary closing conditions.

In a separate press release, Ritchie Bros., and Caterpillar Inc. (CAT) announced that they have entered into a strategic alliance agreement. The strategic alliance is expected to deliver significant benefits to both companies, Caterpillar's independent dealers and their respective customers, continuing an accelerated delivery of Caterpillar's Internet of Things (IoT) connectivity offerings to improve customer fleet utilization.

Under the terms of the agreement, Ritchie Bros. will become Caterpillar's preferred global partner for live onsite and online auctions with respect to used Caterpillar equipment, and will complement Caterpillar's existing dealer channels.

Ritchie Bros. will provide Caterpillar and its dealers with access to proprietary auction platforms, software and other value-added services, thereby enhancing the exchange of information and services between customers, dealers and suppliers.

The strategic alliance is also expected to strengthen Ritchie Bros.' relationship with Caterpillar's independent dealers around the world by providing them enhanced and continued access to a global auction marketplace to sell their used equipment.