Item 1.02. Termination of a Material Definitive Agreement.
Termination of the Credit Agreement
In connection with the consummation of the transactions contemplated by the
Merger Agreement on March 20, 2023, IAA terminated the Credit Agreement, dated
as of April 30, 2021 (as amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), by and among IAA, as borrower, the
other loan parties thereto, the lenders party thereto and JPMorgan Chase Bank,
N.A., as administrative agent, collateral agent and issuing bank. In connection
with the termination of the Credit Agreement, all outstanding borrowings and all
unpaid fees thereunder were paid in full and all commitments thereunder were
terminated.
Redemption of Senior Notes
In connection with the consummation of the transactions contemplated by the
Merger Agreement, on March 20, 2023, IAA redeemed all of IAA's 5.500% Senior
Notes due 2027 (the "Senior Notes") issued pursuant to that certain Indenture,
dated as of June 6, 2019, (the "Indenture") by and between IAA, the guarantors
party thereto and U.S. Bank National Association. In accordance with the
Indenture, IAA redeemed $500 million in the aggregate principal amount of the
Senior Notes at a redemption price equal to 102.750% of the principal amount of
the Senior Notes redeemed plus accrued and unpaid interest thereon through but
not including March 20, 2023.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On March 20, 2023, RBA completed its acquisition of IAA pursuant to the Merger
Agreement, the terms of which are described in Item 1.01 of each of the Current
Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC")
by IAA on November 7, 2022 and the Current Report on Form 8-K filed with the SEC
by IAA on January 23, 2023, each of which Items is incorporated by reference
herein.
Upon the terms and subject to the conditions set forth in the Merger Agreement,
(i) Merger Sub 1 was merged with and into IAA (the "First Merger"), with IAA
surviving the First Merger as a direct wholly owned subsidiary of US Holdings
(the "Surviving Corporation") and (ii) immediately following the consummation of
the First Merger, the Surviving Corporation was merged with and into Merger Sub
2 (the "Second Merger" and, together with the First Merger, the "Mergers"), with
Merger Sub 2 surviving the Second Merger as a direct wholly owned subsidiary of
US Holdings (such surviving entity, the "Surviving LLC").
Pursuant to the Merger Agreement, each share of common stock, par value $0.01
per share, of IAA (the "IAA Common Stock") issued and outstanding immediately
prior to the effective time of the First Merger (the "Effective Time")
(excluding any shares of IAA Common Stock held by IAA as treasury stock, owned
by RBA, US Holdings, Merger Sub 1 and Merger Sub 2 immediately prior to the
Effective Time, or owned by stockholders of IAA ("IAA Stockholders") who have
validly demanded and not withdrawn appraisal rights in accordance with Section
262 of the Delaware General Corporation Law) was converted automatically into
the right to receive: (A) 0.5252 (the "Exchange Ratio") of a common share,
without par value, of RBA (the "RBA Common Shares") and (B) $12.80 in cash,
without interest and less any applicable withholding taxes. Additionally, the
holders of the outstanding IAA restricted stock awards ("IAA RSAs") and
outstanding IAA phantom stock awards ("IAA Phantom Stock Awards") granted to a
non-employee director of IAA pursuant to the IAA 2019 Omnibus Stock and
Incentive Plan (the "IAA Equity Plan") and its Directors Deferred Compensation
Plan (as defined in the Merger Agreement) received (i) 0.5252 of a common share
of RBA and (ii) $12.80 in cash, without interest and less any applicable
withholding taxes, in respect of each share of IAA Common Stock underlying such
holder's IAA RSA or IAA Phantom Stock Award, as applicable. In respect of shares
of IAA Common Stock issued and outstanding immediately prior to the Effective
Time (including any IAA RSAs and IAA Phantom Stock Award that vested in
accordance with their terms as of the Effective Time), RBA delivered
approximately 70.3 million RBA common shares and approximately $1.7 billion in
cash in the aggregate for payment to former IAA stockholders. IAA Stockholders
received cash in lieu of any fractional RBA Common Shares to which they would
otherwise be entitled.
In addition, with respect to IAA's outstanding equity awards, at the Effective
Time:
• each outstanding IAA option ("IAA Option") to purchase shares of IAA Common
Stock granted under the IAA Equity Plan, whether vested or unvested, was
assumed by RBA and converted into an option to purchase the number of RBA
Common Shares (rounded down to the nearest whole share) equal to the product
obtained by multiplying (i) the number of shares of IAA Common Stock subject to
such option immediately prior to the Effective Time by (ii) 0.763139 (the
"Equity Award Exchange Ratio"), at an exercise price per share (rounded up to
the nearest whole cent) equal to the exercise price per share of such option
immediately prior to the Effective Time divided by (y) the Equity Award
Exchange Ratio;
• each outstanding IAA restricted stock unit award ("IAA RSU Award") granted
. . .
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer or Listing.
In connection with the consummation of the Mergers, IAA requested that the New
York Stock Exchange suspend trading of the IAA Common Stock at the close of
market trading on March 20, 2023 and file with the SEC a Notification of Removal
from Listing and/or Registration on Form 25 to delist and deregister IAA Common
Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). In addition, the Surviving LLC intends to file with the
SEC on behalf of IAA a certification on Form 15 requesting that IAA's reporting
obligations under Sections 13 and 15(d) of the Exchange Act be suspended.
The information set forth in the Explanatory Note and Item 2.01 of this Current
Report on Form 8-K is incorporated by reference in this Item 3.01.
Item 3.03. Material Modification to Rights of Security Holders.
The information set forth in the Explanatory Note, Item 2.01, Item 3.01, Item
5.01 and Item 5.03 of this Current Report on Form 8-K is incorporated by
reference.
Item 5.01. Changes in Control of Registrant.
As a result of the consummation of the Mergers, a change in control of IAA
occurred. Following the consummation of the Mergers, the Surviving LLC (as
successor to IAA) became an direct wholly-owned subsidiary of US Holdings.
The information set forth in the Explanatory Note and Item 2.01 of this Current
Report on Form 8-K is incorporated by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 20, 2023, pursuant to the Merger Agreement and as result of the
consummation of the Mergers, each of the directors of IAA (John P. Larson, John
W. Kett, Brian Bales, William Breslin, Sue Gove, Lynn Jolliffe, Peter Kamin,
Olaf Kastner and Michael Sieger) resigned from the board of directors of IAA and
all committees thereof. On the same day, pursuant to the Merger Agreement and
the previously disclosed cooperation agreement, dated as of January 22, 2023, by
and among IAA and affiliates of Ancora Advisors, LLC, and as a result of the
consummation of the Mergers, Brian Bales, William Breslin, Michael Sieger and
Timothy O'Day were appointed as members of the RBA board of directors with terms
expiring at RBA's 2023 Annual Meeting of Shareholders. These individuals
constitute the "IAA Designees" for all purposes of the Merger Agreement.
Pursuant to the Merger Agreement, Eric Jacobs, Chief Financial Officer of RBA,
and James Kessler, President and Chief Operating Officer of RBA, became members
of the board of managers of the Surviving LLC (as successor to IAA). Also on
March 20, 2023, each of IAA's named executive officers, consisting of John W.
Kett, Susan Healy, Tim O'Day, Sidney Peryar and Maju Abraham, ceased serving as
executive officers of the Surviving Corporation or the Surviving LLC. Eric
Jacobs and Darren Watt, in their capacities as the officers of Merger Sub 2,
became the officers of the Surviving LLC.
Mr. Jacobs, age 55, was appointed Chief Financial Officer of RBA, effective June
6, 2022. Mr. Jacobs previously served as Chief Financial Officer at Wheels Up
Experience Inc., an industry-leading marketplace for private aviation. Prior to
Wheels Up, Mr. Jacobs served as Senior Vice President, Corporate Development of
Cox Automotive, Inc., from 2016 to 2017, and Executive Vice President, Chief
Financial & Administrative Officer of Dealertrack Technologies, Inc. Mr. Jacobs
also served as Senior Vice President, General Counsel of Dealertrack and
President of Dealertrack Canada.
Mr. Watt, age 51, joined RBA in 2004 as in-house legal counsel. In 2012,
Mr. Watt was promoted to Vice President Legal Affairs, and in 2013 was appointed
General Counsel and Corporate Secretary, and also assumed the role of VP
Corporate Development until the subsequent establishment of a distinct corporate
development team in 2015, at which point Mr. Watt resumed his focus on legal
matters. Mr. Watt was promoted to Senior Vice President and General Counsel of
RBA in 2016.
The information set forth in the Explanatory Note, Item 2.01 of this Current
Report on Form 8-K is incorporated by reference in this Item 5.02.
Items 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
The information set forth in the Explanatory Note and Item 2.01 of this Current
Report on Form 8-K is incorporated by reference in this Item 5.03.
Pursuant to the Merger Agreement, following the consummation of the Second
Merger, IAA ceased to exist and the Surviving LLC continued as the surviving
entity, and the organizational documents of Merger Sub 2 in effect immediately
prior to the consummation of the Second Merger became the organizational
documents of the Surviving LLC (amended so that the name of the Surviving LLC is
IAA Holdings, LLC), which are attached hereto as Exhibit 3.1 and Exhibit 3.2
respectively and incorporated by reference in this Item 5.03.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
2.1 Agreement and Plan of Merger and Reorganization, dated as of November
7, 2022, by and among Ritchie Bros. Auctioneers Incorporated, Ritchie
Bros. Holdings Inc., Impala Merger Sub I, LLC, Impala Merger Sub II,
LLC, and IAA, Inc. (incorporated by reference to Exhibit 2.1 of IAA,
Inc.'s Form 8-K filed with the SEC on November 7, 2022 (File No.
001-38580)).
2.2 Amendment to the Agreement and Plan of Merger and Reorganization,
dated January 22, 2023, by and among Ritchie Bros. Auctioneers
Incorporated, Ritchie Bros. Holdings, Inc., Impala Merger Sub I, LLC.,
Impala Merger Sub II, LLC, and IAA, Inc. (incorporated by reference to
Exhibit 2.1 of IAA, Inc.'s Form 8-K filed with the SEC on January 23,
2023 (File No. 001-38580)).
3.1 Certificate of Formation of Impala Merger Sub II, LLC, dated as of
November 2, 2022.
3.2 Limited Liability Company Agreement of IAA Holdings, LLC, dated as of
March 20, 2023.
104 The cover page of this Current Report on Form 8-K, formatted in inline
XBRL
† Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The
undersigned registrant hereby undertakes to provide a copy of any of the omitted
schedules upon request by the U.S. Securities and Exchange Commission.
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