RB GLOBAL, INC. Item 1.01 Entry into a Material Definitive Agreement.
As reported by
In connection with the PIPE Transaction, on the Issue Date, the Company and the
Purchasers entered into a registration rights agreement (the "Registration
Rights Agreement") pursuant to which the Company has agreed to grant the
Purchasers certain customary registration rights (under
The foregoing description of the Registration Rights Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the terms of the Registration Rights Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Item 3.02 Unregistered Sales of
The information contained in Items 1.01 and 5.03 of this Current Report on Form 8-K is incorporated herein by reference.
On the Issue Date, the Company issued the Preferred Shares and the Purchased
Common Shares to the Purchasers, in a private placement in reliance on the
exemption from the registration requirements of the Securities Act provided by
Section 4(a)(2) of the Securities Act relating to sales by an issuer not
involving any public offering and the prospectus requirements of
Item 3.03 Material Modification to Rights of Security Holders.
The information contained in Item 5.03 of this Current Report on Form 8-K regarding the Articles of Amalgamation is incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The rights, preferences and privileges of the Preferred Shares are set forth in
the articles of amendment of the Company (the "Articles of Amendment"), amending
the Company's Articles of Amalgamation. The Articles of Amendment became
effective on
Pursuant to the terms of the Articles of Amendment, holders of the Preferred
Shares ("Holders") will have the right to convert their Preferred Shares any
time or times on or after the Issue Date into a number of Common Shares equal to
the face amount of such Preferred Shares multiplied by the then-applicable
conversion rate (the "Conversion Rate"). The Conversion Rate will initially be
0.0136986 Common Shares per
Subject to certain conditions, the Company will have the right to cause all or any portion of the Preferred Shares to be converted into Common Shares at the Conversion Rate, if the closing price of the Common Shares on the NYSE equals or exceeds 190% of the Conversion Price during 20 trading days (whether or not consecutive) occurring in any 30 consecutive trading day period occurring on or after the third anniversary of the Issue Date and ending on the trading day immediately preceding the date the Company sends notice to the Holders of the exercise of such right. In addition, subject to certain conditions, the Company will have the right to cause all or any portion of the Preferred Shares to be converted into Common Shares at the Conversion Rate, if the closing price of the Common Shares on the NYSE equals or exceeds 175% of the Conversion Price during 20 trading days (whether or not consecutive) occurring in any 30 consecutive trading day period occurring on or after the seventh anniversary of the Issue Date and ending on the trading day immediately preceding the date the Company sends notice to the Holders of the exercise of such right.
In addition, in connection with any conversion of Preferred Shares described above, the Company will deliver, to the fullest extent permitted by law and out of funds lawfully available therefor, cash in respect of accrued and unpaid dividends on such converted Preferred Shares.
The Preferred Shares will not have a stated maturity date and will not be subject to any sinking fund.
Ranking
The Preferred Shares will rank, with respect to rights as to dividends,
distributions, redemptions and payments upon the liquidation, dissolution and
winding up of the
Dividends
From and after the Issue Date, Holders will be entitled to receive dividends on
the Preferred Shares (the "Preferential Dividends") at the rate of 5.50% per
annum (the "Preferential Dividend Rate"), payable quarterly in arrears on
On the fourth anniversary of the Issue Date, Holders will have the right to increase the Preferential Dividend Rate to 7.50%, and on the ninth anniversary of the Issue Date, Holders will have the right to increase the Preferential Dividend Rate to a fixed percentage equal to the greater of (x) 600 bps over the daily simple SOFR as then in effect and (y) 10.50%, subject, in each case, to the Company's right to redeem the Preferred Shares for which a dividend rate increase has been demanded (an "Increased Dividend Rate Demand") as described below.
In addition, from and after the Issue Date, Holders will also be entitled to
receive the greater of (i) any regular quarterly cash dividends paid to the
holders of Common Shares and (ii)
Company Redemption Rights
If the Merger Agreement is terminated in accordance with its terms and subject
to certain conditions, then during the 90 day period following the later of
(x)
Voting
Other than in connection with the special meeting of the Company's shareholders with respect to the approval of the issuance of Common Shares in connection with the Merger, Holders will be entitled to vote together with the Common Shares on an as-converted basis on all matters permitted by applicable law, subject to certain exceptions to enable compliance with applicable antitrust law.
Holders of Preferred Shares will also be entitled to a separate class vote with respect to amendments to the Company's organizational documents that generally have an adverse effect on the Preferred Shares as well as other customary preferred shareholder approval rights.
Offer to Repurchase Upon Change of Control
Upon consummation of one or more specified change of control transactions (the "Change of Control Transaction"), the Holders will have the right to require the Company to repurchase the Preferred Shares in cash at an amount equal to the sum of (i) the greater of (A) the face amount of Preferred Shares submitted for repurchase and (B) the "Change of Control As-Converted Value" with respect to the Preferred Shares submitted for repurchase, (ii) the "Make-Whole Amount" and (iii) the "Change of Control Accrued Dividends Payment" (as each of those terms is defined in the Articles of Amendment) (the "Change of Control Redemption Price"); provided, however, that each Holder, at its option, may elect instead to convert its Preferred Shares into the applicable change of control consideration in accordance with the procedures set forth in the Articles of Amendment.
In addition, the Company has the right to redeem the Preferred Shares at the Change of Control Redemption Price in the event of a Change of Control Transaction where the successor entity is not traded on certain eligible markets as specified in the Articles of Amendment.
The foregoing description of the Preferred Shares and the Articles of Amendment does not purport to be complete and is subject to, and qualified in its entirety by reference to, the terms of the Articles of Amendment, which are attached hereto as Exhibit 3.1 and are incorporated herein by reference.
Forward-Looking Statements
This report contains information relating to a proposed business combination transaction between RBA and IAA in addition to information relating the investment into RBA by Starboard. This report includes forward-looking information within the meaning of Canadian securities legislation and forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, "forward-looking statements"). Forward-looking statements may include statements relating to future events and anticipated results of operations; business strategies; the anticipated benefits of the proposed IAA transaction; the anticipated impact of the proposed IAA transaction on the combined company's business and future financial and operating results; the expected or estimated amount, achievability, sources, impact and timing of cost synergies and revenue, growth, operational enhancement, expansion and other value creation opportunities from the proposed IAA transaction; the expected debt, de-leveraging and capital allocation of the combined company; the anticipated closing date for the proposed IAA transaction; other aspects of RBA's or IAA's respective businesses, operations, financial condition or operating results; and other statements that are not historical facts. There can be no assurance that the proposed IAA transaction will in fact be consummated. These forward-looking statements generally can be identified by phrases such as "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "goal," "projects," "contemplates," "believes," "predicts," "potential," "continue," "foresees," "forecasts," "estimates," "opportunity" or other words or phrases of similar import.
It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on the results of operations and financial condition of the combined companies or the price of RBA's common shares or IAA's common stock. Therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. While RBA's and IAA's management believe the assumptions underlying the forward-looking statements are reasonable, these forward-looking statements involve certain risks and uncertainties, many of which are beyond the parties' control, that could cause actual results to differ materially from those indicated in such forward-looking statements, including but not limited to: the possibility that shareholders of RBA may not approve the issuance of new common shares of RBA in the transaction or that stockholders of IAA may not approve the adoption of the Merger Agreement; the risk that a condition to closing of the proposed IAA transaction may not be satisfied (or waived), that either party may terminate the Merger Agreement or that the closing of the proposed IAA transaction might be delayed or not occur at all; the anticipated tax treatment of the proposed IAA transaction; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed IAA transaction; the diversion of management time on transaction-related issues; the response of competitors to the proposed IAA transaction; the ultimate difficulty, timing, cost and results of integrating the operations of RBA and IAA; the effects of the business combination of RBA and IAA, including the combined company's future financial condition, results of operations, strategy and plans; the failure (or delay) to receive the required regulatory approval of the transaction; the fact that operating costs and business disruption may be greater than expected following the public announcement or consummation of the proposed IAA transaction; the effect of the announcement, pendency or consummation of the proposed IAA transaction on the trading price of RBA's common shares or IAA's common stock; the ability of RBA . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 3.1 Articles of Amendment, datedFebruary 1, 2023 . 10.1* Registration Rights Agreement, dated as ofFebruary 1, 2023 , by and amongRitchie Bros. Auctioneers Incorporated and the Purchasers named therein. 104 Cover Page Interactive Data File. * Certain schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. RBA agrees to furnish a supplemental copy of any omitted schedule or attachment to theSEC upon request. + Furnished herewith.
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