IAA reinforced its European resources on Friday via an acquisition.

According to a news release, IAA — the presenting sponsor of Auto Remarketing’s 40 Under 40 honorees who will be recognized during Used Car Week — announced it has signed an agreement to acquire the stock of SYNETIQ, a leading integrated salvage and vehicle dismantling company in the United Kingdom for £225 million.

IAA said it 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. IAA highlighted that 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 Sept. 30, the business generated revenue of approximately £154 million. The transaction is expected to be immediately accretive to earnings per share, according to IAA

“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,” IAA chief executive officer and president John Kett said in the news release.

“SYNETIQ’s management team and employees have done a tremendous job of using innovation to maximize value for their customers,” Kett continued. “We also know that reusable parts are increasingly of interest to U.K. 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,” Kett went on to say.

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).

IAA explained that the final consideration to be paid is subject to working capital and other adjustments. The company added that the transaction will be financed through a combination of existing balance sheet cash and existing credit facilities.

IAA also mentioned that closing is expected to occur by the end of October. IAA and SYNETIQ will continue to operate independently in the market until clearance of the transaction is obtained from the CMA.

“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,” SYNETIQ chief executive officer Tom Rumboll said in the news release. “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,” Rumboll went on to say.

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 advisor to SYNETIQ, and KPMG Law and Euclid Law are serving as legal advisors.