Insurance Auto Auctions, Inc. in Westchester, Ill. has signed an agreement to be acquired by affiliates of Kelso & Company, a New York based private equity investment firm.
The aggregate value of the merger transaction is approximately $385 million. ValueAct Capital, IAA’s largest shareholder, has agreed to vote approximately 29.7% of the outstanding shares in support of the transaction. Under the terms of the agreement, IAA’s stockholders will receive $28.25 per share in cash upon the closing of the merger, a 26.1 percent premium to yesterday’s close and a 40 percent premium to the average close of the past six months.
The closing of the transaction is subject to certain terms and conditions customary for transactions of this type, including stockholder approval and the completion of financing. The parties currently anticipate consummating the transaction in the second quarter of 2005.
The equity financing necessary for the transaction has been committed by Kelso & Company, which manages a $2.1 billion private equity fund, and certain members of IAA management. Kelso & Company has also received debt financing commitments for the transaction.
Insurance Auto Auctions, Inc., founded in 1982,helps insurance companies process and sell total-loss and recovered-theft vehicles. The company currently has 78 sites across the United States.
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