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Tuesday Ticker: November 8, 2022

Toronto, Ontario ⁠— In this weekly Tuesday Ticker, a B.C.-based company buys IAA Inc. in a deal worth US$7.3 billion; Uni-Select reports favourable Q3 results in the face of an unfavourable dollar and Magna lowers its expectations for North America.

Bros from Burnaby

Ritchie Bros. Auctioneers, a Canadian equipment marketplace based in Burnaby, B.C., said Monday that it would purchase U.S.-based IAA Inc. in a US$7.3 billion deal.

The company said the deal aligns with Ritchie Bros.’ goal of diversifying into the salvage vehicle market.

Ritchie Bros. touted a market cap of approximately US$6.9 billion last Friday, said Reuters, citing Refinitiv data, while IAA’s market value was reported at US$5.3 million. 

Shares of IAA Inc. jumped 3.85 percent in early-hours trading but dipped nearly eight percent between 9:30 a.m. and 11:30 a.m. Monday. 

As of Monday’s close, shares of IAA Inc. were trading at $38.42; down one percent from Friday’s close. 

Power to the pricing 

Uni-Select announced its Q3 2022 financial results last week, reporting consolidated sales of US$452.7 million⁠—up US$26.6 million (6.2 percent) over Q3 2021–or up 11.6 percent excluding the “unfavourable fluctuation of the British pound and Canadian dollar against the US dollar,” said the company.

The Canadian Automotive Group segment reported sales of US$160.2 million. Excluding the impact of “unfavourable fluctuation of the Canadian dollar against the U.S. dollar,” the company reported sales of US$5.4 million or 3.7 percent during Q3 2022. Sales increased by US$21.1 million or 14.5 percent compared to last year’s period. The company said organic growth increases (7.8 percent) and acquisitions represented 6.7 percent of sales growth; price increases drove upticks in organic growth, said the company.

The company’s FinishMaster U.S. segment reported sales of US$189.1 million with organic growth of 8.1 percent “driven by price increases,” said Uni-Select. 

Click here for more information on Uni-Select’s Q3 results and nine-month highlights. 

 

Magna-fying glass

Magna International reported its Q3 earnings last week, simultaneously narrowing its full-year outlook for 2022 amid lower vehicle production in North America and Europe. 

The company reported a net income of US$289 million from $11 million in Q3 last year. Third-quarter sales rose 17 percent to US$9.27 billion amid slightly higher vehicle production rates, compared with a year ago. 

The company’s body exteriors and structure unit sales increased 25 percent from Q3 2021; Magna has benefitted from the launch of new projects this year, with the Ford F-150 Lightning, Rivian R1T and Jeep Wagoneer. 

Despite higher vehicle production rates, Magna still reduced its full-year outlook for its 2022 North American production estimates; it raised its full-year estimates for China by 1.1 million units, though.

The company now expects net income between US$1.3 billion and US1.4 billion, down from its former estimate of US$1.5 billion. 

Magna projects annual sales between US$37.4 billion and US$38.4 billion; down from a projection of US$37.6 billion and US$39.2 billion.

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