August 30, 2016 – Ritchie Bros. Auctioneers Inc. has entered an agreement to acquire IronPlanet for $758.5 million. Under the terms of the transaction, Ritchie Bros. will acquire 100% of the equity of IronPlanet for approximately $740 million in cash and the assumption of unvested equity interests in IronPlanet, subject to adjustment, that brings the total transaction value to approximately US$758.5 million.
Ritchie Bros. has secured employment agreements with key executives, who will supplement the strength of its global management team. Gregory Owens, chairman and CEO of IronPlanet, has agreed to join the combined company’s executive committee upon closing.
The transaction was approved by the boards of directors of both companies and is expected to close by the first half of 2017, subject to regulatory clearances and the satisfaction of other customary closing conditions.
Founded in 1999, IronPlanet focuses largely on the needs of corporate accounts, equipment manufacturers, dealers, and government entities in equipment disposition solutions. Its sales are primarily conducted through online-only platforms, with weekly online auctions and in other equipment marketplaces.
IronPlanet sold approximately $787 million of Gross Merchandise Value (GMV)1 through its sales channels during 2015, and has achieved a 25.2% compounded growth rate in assets sold from 2013 through 2015. This growth momentum has continued, with a 41% increase in GMV during the first half of 2016 relative to the same period in 2015.
“This transformative transaction is the logical next step for Ritchie Bros., building on our multi-channel platform, global reach and long-standing customer relationships. Together with IronPlanet, we will create a combined company of trusted brands with the ability to provide customers around the world with a greater number of choices and platforms to sell, buy, and list equipment when, where and how they want – whether onsite or online. Our commitment to diversifying our offerings is directly in line with customer demand for multiple selling and buying solutions,” said Ravi Saligram, CEO of Ritchie Bros. “This acquisition will help accelerate our growth in revenue and earnings and add shareholder value by continuing to expand our capabilities in new channels, sectors, regions and customer segments. Ritchie Bros. and IronPlanet both have talented teams and winning cultures built on a passion for serving customers.”
The broader ranging multi-format equipment sales and asset management platform now includes:
- Ritchie Bros. Auctioneers live onsite and online simulcast auctions
- IronPlanet online-only auctions, including a Reserved Daily Marketplace & Buy-Now formats
- Cat Auction Services live onsite and online simulcast auctions (auctions anchored by Caterpillar dealers)
- Kruse Energy & Equipment AuctioneersSM live onsite and online simulcast auctions (for the oil & gas industry)
- EquipmentOne online auction and marketplace
- Mascus sales listing service
- TruckPlanet, GovPlanet, SalvageSale and other sector-specific online sales channels
- Ritchie Bros. Private Treaty
- Ritchie Bros. Financial Services
Ritchie Bros. also announced today that it has entered into a historic, long-term strategic alliance with Caterpillar, which will significantly strengthen its relationship with Caterpillar dealers. Ritchie Bros. will become Caterpillar’s preferred global partner for live onsite and online auctions under the agreement, which will take effect upon completion of the IronPlanet acquisition.
The addition of IronPlanet provides Ritchie Bros. with access to new, large customer segments, including government surplus and oil & gas. Furthermore, the wider range of sales solutions offered by the combined company will allow it to more effectively meet customer preferences in many key international locations, including the U.K., Germany, Japan and China – where Ritchie Bros.’ established infrastructure will provide a platform to launch IronPlanet solutions.
The acquisition strengthens digital capabilities to provide enhanced levels of customer service. The combined entity will have an integrated technology platform to provide customers with more tailored solutions that meet their needs and enhance the overall customer experience. These solutions, including multiple dealer portal options, valuable business intelligence, amplified data analytics and multiple online sales channels, position the combined company to provide comprehensive asset management solutions.
Collectively, Ritchie Bros. and IronPlanet (on a pro forma basis) sold more than $3 billion of assets through online transactions during the 12 months trailing June 30, 2016, ranking the combined business among the world’s top 50 B2B e-commerce companies, based on value sold.