Ritchie Bros. amends credit facility to prepare for IAA merger

Chicago, Dec. 12 – Ritchie Bros. Auctioneers Inc. amended its credit agreement with a syndicate of lenders to prepare for the previously announced merger with IAA, Inc., according to a press release and an 8-K filing with the Securities and Exchange Commission.

The Dec. 9 amendments include commitments for a term loan A facility for $1,825,000,000 to be used to finance the merger.

Ritchie Bros. will also have the ability to borrow up to $200 million of the revolving facility on a limited conditionality basis to finance the merger.

Interest on the revolver and term loan A will be at SOFR plus 175 basis points to 300 bps, based on the company’s consolidated leverage ratio.

The commitment fee on the revolver will be between 35 bps and 60 bps.

Interest will start at SOFR plus 275 bps, and the commitment fee will initially be 55 bps.

The maturity date will be Sept. 21, 2026.

There will be a 25 bps step-up upon the consummation of the acquisition if the company or its subsidiaries does not receive $800 million in net cash proceeds from senior notes at or before such time.

The company also may add a future incremental term loan B.

Various covenant baskets will be upsized on the closing date to reflect the size and needs of the combined company.

The amendment allowed Ritchie Bros. to permanently terminate the previously announced backstop senior secured revolving credit commitments in their entirety and reduce the previously announced senior secured bridge facility commitments by the amount of the term loan A facility and the amount of existing term loans under Ritchie Bros.' existing credit agreement.

BofA Securities, Inc., RBC Capital Markets, Goldman Sachs Bank USA and Wells Fargo Securities, LLC, served as joint bookrunners.

BofA Securities, Inc., RBC Capital Markets, Goldman Sachs Bank USA, Wells Fargo Securities, LLC, Bank of Nova Scotia and Export Development Canada served as joint lead arrangers.

Royal Bank of Canada, Goldman Sachs Bank USA, Canadian Imperial Bank of Commerce, Export Development Canada, HSBC Bank Canada, MUFG Bank, Ltd., Canada Branch, Bank of Nova Scotia, U.S. Bank NA, Wells Fargo Bank NA, Canadian Branch and Truist Bank served as co-syndication agents.

Bank of Montreal, Citizens Bank NA, Desjardins, Toronto-Dominion Bank and Westpac Banking Corp. served as co-documentation agents.

Under the merger agreement, as previously reported, IAA is being bought for $10.00 in cash and 0.5804 of a share of Ritchie Bros. common stock for each share of IAA common stock. The transaction is valued at about $7.3 billion, including the assumption of $1 billion of net debt.

Ritchie Bros. is a Vancouver, B.C.-based industrial auctioneer and equipment distributor. IAA is a Westchester, Ill.-based digital marketplace connecting vehicle buyers and sellers.

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