IAA, Inc. has announced it has signed an agreement to acquire the stock of SYNETIQ Ltd, a leading integrated salvage and vehicle dismantling company in the United Kingdom, for £225 million. IAA, Inc. will acquire the stock of SYNETIQ through its indirect wholly owned subsidiary IAA International Holdings Limited.
Founded in 2019 from the merger of four entities, SYNETIQ provides salvage auction services for insurance companies, accident management companies, and other public and private sellers. In addition, the company is a leading seller of reusable parts that are dismantled from salvage vehicles and reissued into the automotive supply chain. SYNETIQ has 14 locations and approximately 500 employees throughout the United Kingdom. The business has capabilities covering the entire salvage journey, from collection to vehicle auction or dismantling, and optimizes vehicle value through parts and material recycling. For the 12 months ended September 30, 2021, the business generated revenue of approximately £154 million. The transaction is expected to be immediately accretive to earnings per share.
John Kett, Chief Executive Officer and President of IAA, said, “We are very excited about the acquisition of SYNETIQ. This transaction significantly expands our business in the United Kingdom from both a scale and portfolio perspective, supporting the overall IAA growth strategy. SYNETIQ’s management team and employees have done a tremendous job of using innovation to maximize value for their customers. We also know that reusable parts are increasingly of interest to UK insurers as they look to satisfy customer needs and meet their environmental goals. SYNETIQ’s focus and expertise in this area is a true differentiator that is consistent with our focus on sustainability in the UK market and beyond. We look forward to welcoming the SYNETIQ team to IAA.”
Under the terms of the agreement, IAA will pay £186 million at closing, with the remaining £39 million contingent upon receipt of the merger control approval from the UK Competition and Markets Authority (“CMA”). The final consideration to be paid is subject to working capital and other adjustments.
The transaction will be financed through a combination of existing balance sheet cash and existing credit facilities. Closing is expected to occur by the end of October 2021. IAA and SYNETIQ will continue to operate independently in the market until clearance of the transaction is obtained from the CMA.
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