Ritchie Bros. (NYSE:RBA) sweetened its bid for auto salvage company IAA (NYSE:IAA) with a larger cash component as Starboard Value LP makes a $500M investment in Ritchie Bros, moves that it hopes will make the deal more palatable to RBA and IAA shareholders, the company, the car and truck auctioneer said Monday.

In addition, Ritchie Bros.’ (RBA) board expects to approve a one-time special dividend of $1.08 per common share as of a pre-closing record date and contingent on closing of the IAA (IAA) deal. Last week, Ritchie Bros. (RBA) shareholder Luxor Capital filed a preliminary proxy opposing the deal.

Under the amended merger agreement, IAA (IAA) shareholders will bet $12.80 per share in cash and 0.5252 common shares of Ritchie Bros. (RBA), equal to ~$44.40 per IAA share based on RBA’s closing price Friday. That represents a 9.2% premium to IAA’s closing price of $40.65. In the previous offer, IAA (IAA) shareholders were offered $10 in cash and 0.5804 shares of RBA per share held.

The new bid is composed of 29% cash/71% stock compared with the previous mix of 22% cash/78% stock.

As part of the investment agreement, Starboard Value CEO Jeffrey Smith will join Ritchie Bros.’ (RBA) board after shareholders of both RBA and IAA approve the pending acquisition.

RBA shares gained 0.6% in Monday premarket trading.

Under the investment pact, Starboard will buy $485M of newly issuable senior preferred shares of Ritchie Bros. (RBA), convertible into common shares with an initial conversion price of $73.00 per share. The investment firm also agreed to buy ~$15M of RBA common shares at a purchase price of $59.72 per share.

IAA shareholder Ancora said it supports the revised agreement.

Conference call at 8:00 AM ET.

Ritchie Bros. (RBA) originally agreed in November to acquire IAA (IAA) for $7.3B in stock and cash.