Ritchie Bros. buys IronPlanet for US$758.5 million
Ritchie Bros. (NYSE:RBA) will acquire IronPlanet for US$758.5 million cash.
The Burnaby-based industrial auctioneer, which began in Kelowna in 1958, has 110 locations worldwide and a market cap of $3.14 billion.
Ritchie Bros. closed the day up 1.51% to $28.89.
Ritchie Bros. intends to finance the transaction through a combination of cash on hand and new debt.
Gregory J. Owens, Chairman and Chief Executive Officer of IronPlanet, will join Ritchie Bros.'s executive team once the transaction is completed.
IronPlanet, a private company based in the United States that was founded in 1999, sold approximately US$787 million of gross merchandise value through its sales channels during 2015 and achieved a 25.2% compounded growth rate in assets sold from 2013 through 2015.
The deal represents a 13.0x multiple of IronPlanet's 2017 estimated adjusted EBITDA, inclusive of the expected $100 million net present value of tax synergies and $20 million in run-rate cost synergies.
Ritchie Bros. also announced that it would become Caterpillar's preferred global partner for live onsite and online auctions under the agreement, which will take effect upon completion of the IronPlanet acquisition.
CORRECTION: Ritchie Bros. was founded in 1958, not 1955 as previously stated.