Auction firm bolsters online presence with $758.5m buyout and becomes preferred global partner of machinery giant Caterpillar
Industrial and machinery auction heavyweight Ritchie Bros. has acquired online used heavy equipment marketplace IronPlanet for $758.5 million, and entered into a strategic alliance agreement with Caterpillar.
The Canada-headquartered Ritchie Bros., the world’s largest industrial auctioneer, said in a statement that the IronPlanet acquisition complements its primarily end-user customer base, as it focuses largely on the needs of corporate accounts, equipment manufacturers, dealers and government entities for equipment solutions.
Founded in 1999, the privately-owned US company, IronPlanet, conducts its sales primarily through online-only platforms, with weekly online auctions, and in other equipment marketplaces, the statement said. It sold approximately $787m of Gross Merchandise Value (GMV) 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,” said Ravi Saligram, chief executive officer of Ritchie Bros. “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.”
Gregory J. Owens, chairman and chief executive officer of IronPlanet, added: “This is an exciting day for IronPlanet, our customers, employees and shareholders. IronPlanet joining forces with Ritchie Bros. will allow the combined company to deliver a multi-channel marketplace that will provide a full range of equipment asset management and disposition solutions. IronPlanet has built a leading online marketplace and technology platform across a number of verticals, and when combined with Ritchie Bros.’ strength in live onsite auctions, will prove to be a powerful combination in driving value for our customers.”
Meanwhile, the statement said that the strategic alliance agreement with Caterpillar is expected to deliver significant benefits to both companies, Caterpillar’s independent dealers and their respective customers, continuing an accelerated delivery of Caterpillar’s Internet of Things (IoT) connectivity offerings to improve customer fleet utilisation.
Under the terms of the agreement, Ritchie Bros. will become Caterpillar’s preferred global partner for live onsite and online auctions with respect to used Caterpillar equipment, and will complement Caterpillar’s existing dealer channels. Ritchie Bros. will provide Caterpillar and its dealers with access to proprietary auction platforms, software and other value-added services, thereby enhancing the exchange of information and services between customers, dealers and suppliers. The strategic alliance is also expected to strengthen Ritchie Bros.’ relationship with Caterpillar’s independent dealers around the world by providing them enhanced and continued access to a global auction marketplace to sell their used equipment.
“Ritchie Bros. is proud to enter into this historic alliance, which will strengthen our relationship with Caterpillar, its dealers and end users, as well as help expand our global reach and footprint,” Saligram said. “Our marketing capabilities, unrivaled suite of technology and powerful multi-channel transactional platforms will add tremendous value and make us a trusted strategic partner to the Caterpillar family.”
The strategic alliance between Ritchie Bros. and Caterpillar will have an initial five-year term. After completing the acquisition of IronPlanet, Ritchie Bros. will operate live onsite auctions at participating Caterpillar dealers’ locations under the Cat Auction Services brand and also encompass Ritchie Bros.’ other onsite and online brands.