Ritchie Bros. Co-Founder and Former President & COO Speak Out Against Merger With IAA

Rhea-AI Summary

On March 13, 2023, David E Ritchie and C Russell Cmolik, co-founders of Ritchie Bros, expressed serious concerns regarding the proposed merger with IAA, Inc. (NYSE: IAA). They argue the merger could undermine Ritchie Bros' corporate culture and customer focus, risking the company's legacy. The authors encourage shareholders to revoke their votes in favor of the merger ahead of the March 14, 2023, meeting, pointing to declining business conditions at IAA that could divert management's attention from Ritchie Bros' core operations. They stress the importance of preserving the company's employee and customer-centric approach rather than pursuing this merger.

Positive

• None.

Negative

• Concerns about the merger with IAA potentially damaging Ritchie Bros' corporate culture and customer focus.
• Merger could distract management from core business operations amid IAA's declining business conditions.

• Express strong belief that Merger with IAA threatens customer focus and corporate culture
• Shareholders should call brokers to revoke votes cast in favour of the deal

VANCOUVER, BC, March 13, 2023 /PRNewswire/ - David E Ritchie, Co-Founder, Former Chairman and Director; and C Russell Cmolik, Former President and Director of Ritchie Bros. Auctioneers Incorporated (NYSE: RBA) (TSX: RBA) ("Ritchie Bros." or the "Company"), released a letter to shareholders of Ritchie Bros., in connection with the proposed merger with IAA, Inc. (NYSE: IAA):

Dear Ritchie Bros. Shareholders,

As fellow shareholders of Ritchie Bros. we write to you with deep concern for the great Company we began building over 60 years ago.

We have reviewed closely Luxor's analysis opposing the IAA transaction and believe that it is bang on, and that the impending merger with IAA risks negatively impacting the culture of the Company and with it, its proud legacy. Ritchie Bros. is a great business with tremendous customer support, and we believe there is no need to dilute its business in this manner.

We care passionately about the Company and its ability to continue to flourish, and to be successful.

Ritchie Bros. has always been exceptionally employee and customer-focused. Indeed, it has been the very culture of the Company to take the very best care of our employees and customers, first and foremost. We know customers are concerned and uneasy about this proposed merger, and what the ramifications may be to them. What a shame it would be to see this proud legacy wither to the detriment of the many valued hard-working and dedicated employees, and other stakeholders; and ultimately the value to the shareholders (many of whom are the very same employees and customers we spoke of above). 

In order to not interfere with the ongoing operations of the Company, we have purposely not discussed these issues with the employees of Ritchie Bros., nor relied on them for these conversations. 

Just a few days ago Ritchie Bros. celebrated its 25^th anniversary as a public company, and should be celebrating future milestones as it continues to develop and grow its traditional core business.  We believe that this is where the Company's focus should remain, not integrating a completely different business. 

You may ask, after all this time, why have we decided to speak up now? Frankly, after seeing several shareholders announce their opposition to the merger with IAA, and the incredible momentum provided by the recommendations of the important proxy advisors ISS and Glass Lewis to vote against the deal, we believed either the board of directors of Ritchie Bros. would seek to terminate the transaction, or shareholders would simply vote down the deal. Instead, we were alarmed to read in the press on March 10^th that the merger with IAA may be approved by a small margin of shareholders. The negative reaction of the stock price to that news, consistent with the market reaction to the deal announcement on November 7, 2022 and various pronouncements since then, tells us many shareholders share our concerns.

As discussed in much of the public analysis from Luxor challenging this deal, we believe the proposed merger with IAA will require an immense amount of management's time to turnaround IAA's declining business at a time when Ritchie Bros. should be re-doubling its efforts to serve its customers, employees and other key stakeholders – and grow its incredible core business. We are concerned that losing the trust and confidence of our customers, both large and small, will be detrimental to our business. We are also concerned about what the long-term prospects of the auto salvage business may be in this rapidly changing world.

There is still time left to do something.

Please read carefully the thorough analysis that is available publicly opposing the deal. We understand that despite the voting deadline having passed, although shareholders may not be able to change their vote from 'for' to 'against', you can still revoke votes that you have cast in favour of the merger with IAA. We urge those shareholders to contact their banks and brokers and instruct them to revoke your vote for the merger with IAA.  Time is of the essence, and we ask that you revoke your 'for' votes today, and in any case, before the shareholder meeting on March 14, 2023. If you have already voted against the merger with IAA, we thank you, and no further action on your part is needed.

Respectfully,

David E Ritchie
C Russell Cmolik

Disclaimer: We are not soliciting proxies relating to the RBA shareholder meeting.

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SOURCE David E Ritchie and C Russell Cmolik

FAQ

What concerns did Ritchie Bros' co-founders raise about the merger with IAA?

They stated that the merger could negatively impact the company's culture and customer focus.

When is the shareholder meeting to vote on the merger with IAA?

The shareholder meeting is scheduled for March 14, 2023.

What actions can shareholders take regarding their votes on the IAA merger?

Shareholders can revoke their 'for' votes by contacting their banks and brokers.

What did Ritchie Bros' co-founders suggest should be the company's focus instead of the merger?

They believe the company should focus on growing its core business and serving its customers.

What is the potential impact of the merger on Ritchie Bros' stakeholders?

There are concerns that the merger could undermine trust and confidence among customers and reduce the company's value.