Shares of global asset management and disposition company Ritchie Bros. (NYSE:RBA) are tanking today despite a third-quarter beat owing to its $7.3 billion acquisition of IAA, Inc (NYSE:IAA).
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Revenue rose 24.8% year-over-year to $411.5 million, outpacing estimates by ~$45.3 million. EPS at $0.53 too, came in ahead of expectations by $0.14. Further, gross transaction value (GTV) increased by 7% over the prior year to $1.4 billion.
The company witnessed a rebound in lot volumes and a strong mix of adjusted prices during this period.
Separately, RBA has agreed to acquire IAA in a deal valued at about $7.3 billion. This also includes the assumption of net debt of $1 billion.
The acquisition of IAA, a global digital marketplace, will help diversify RBA’s customer base while also providing it with a presence in the vehicle remarketing vertical.
Further, the move is also expected to be accretive to RBA’s bottom line and help generate $100 million to $120 million in annual cost synergies by the end of 2025.
Shares of the company are down ~21% today.
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