NEW YORK (TheStreet) -- Shares of Ritchie Bros. Auctioneers (RBA) - Get Ritchie Bros. Auctioneers Incorporated Report were spiking 17.87% to $34.07 on heavy trading volume mid-morning Tuesday as the Canadian industrial auctioneer agreed late yesterday to purchase IronPlanet for approximately $758 million.
IronPlanet is a Pleasanton, CA-based e-commerce site that sells used heavy construction equipment. The site is backed by construction and mining equipment manufacturer Caterpillar (CAT).
As part of the deal, Ritchie Bros will become Caterpillar's "preferred global partner" for live and on site auctions of used Caterpillar equipment.
The partnership will begin once the IronPlanet deal closes in the first half of 2017, according to Reuters.
Shares of Caterpillar were lower in mid-morning trading on Tuesday.
About 1.15 million of Ritchie Bros' shares have changed hands so far today vs. its average volume of 630,032 shares per day.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
The team rates Ritchie Bros Auctioneers as a Buy with a ratings score of B+. This is driven by some important positives, which it believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks the team covers. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and increase in stock price during the past year. The team feels its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: