A £150m-turnover salvage and vehicle dismantling company is set to be acquired by a US-listed company for £225m.
IAA Inc, a global digital marketplace connecting vehicle buyers and sellers, has signed an agreement to acquire the stock of Synetiq through its indirect wholly owned subsidiary, IAA International Holdings.
Synetiq was formed through a four-way merger in 2019 and provides salvage auction services for insurance companies, accident management companies, and other public and private sellers.
It also sells reusable parts that are dismantled from salvage vehicles and reissued into the automotive supply chain.
The Doncaster-headquartered company has 14 locations and approximately 500 employees throughout the UK. For the 12 months ended September 30, 2021, it generated revenue of about £154m.
IAA will pay £186m at closing, with the remaining £39m contingent upon receipt of the merger control approval from the UK Competition and Markets Authority (CMA).
Tom Rumboll, chief executive at Synetiq, said: "We are delighted and proud that IAA has recognized the great work the Synetiq team is delivering to change the vehicle recycling industry, and deliver optimized financial and environmental returns for our clients. Now we are presented a fantastic opportunity for continued growth supported by IAA's global footprint, robust marketplace and innovation.
"From the proud and rich history of the businesses that formed Synetiq to what our team has achieved since, this is another milestone moment and the start of the next phase of an exciting future for our business."
John Kett, chief executive and president of IAA, added: "We are very excited about the acquisition of Synetiq. This transaction significantly expands our business in the UK 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."
IAA and Synetiq will continue to operate independently in the market until clearance of the transaction is obtained from the CMA.
XMS Capital Partners is serving as financial advisor to IAA. O'Melveny & Myers and Walker Morris are serving as IAA's legal advisors, and Deloitte is serving as accounting and tax advisor. EY is serving as exclusive financial adviser to Synetiq, and KPMG Law and Euclid Law are serving as legal adviser.
Dan Salt led EY’s Midlands-based Strategy & Transaction team, advising the SYNETIQ shareholders on the sale to IAA.
He said: "SYNETIQ are a UK-wide business, and as a leader in integrated salvage and vehicle recycling, will now have an opportunity to explore new markets and opportunities as part of its integration into a global business.
"This was a complex deal and a huge team effort to bring about a successful conclusion. We'd like to congratulate the shareholders on a successful exit and wish the SYNETIQ team every success in its next phase of growth following the transaction."
Business Doncaster are proud to have supported SYNETIQ and look forward to continuing to do so in the future as the company grows.
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