Ritchie Bros. Auctioneers Incorporated (NYSE: RBA) (TSX: RBA), ("Ritchie Bros.," the "Company," "we," "us" or "our"), today announced that Ritchie Bros. Holdings Inc., a Washington corporation and wholly-owned subsidiary of Ritchie Bros. (the "Issuer"), intends to commence an offering for approximately (a) $550 million aggregate principal amount of senior secured notes due 2028 and (b) $800 million aggregate principal amount of senior notes due 2031 (collectively, the "Notes"), subject to market conditions.
Ritchie Bros. intends to use the net proceeds from the offering of the Notes, together with proceeds from its term loan A facility and cash from its balance sheet, to fund the cash portion of the consideration payable in the previously announced merger with IAA, Inc. and its subsidiaries ("IAA" and such transaction, the "Merger"), refinance IAA's existing indebtedness, repay or refinance all of Ritchie Bros.' indebtedness, including Ritchie Bros.' existing 5.375% Senior Notes due 2025 (the "existing 2025 notes"), pay a one-time, special cash dividend to Ritchie Bros.' shareholders1 and pay related fees and expenses. This news release does not constitute a notice of redemption of the existing 2025 notes. The gross proceeds from the offering will be held in an escrow account pending the consummation of the Merger.
The Notes will be offered and sold only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A of the Securities Act of 1933, as amended (the "Securities Act"), and to non-U.S. persons outside the U.S. in reliance on Regulation S of the Securities Act. The Notes have not been and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes have not been and will not be qualified for sale to the public by prospectus under applicable Canadian securities laws and accordingly, any offer and sale of the securities in Canada will be made on a basis which is exempt from the prospectus requirements of such securities laws.
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