Already the world39s largest construction equipment auctioneer Ritchie Bros further consolidates the auction industry with the purchase of IronPlanet
Already the world's largest construction equipment auctioneer, Ritchie Bros. further consolidates the auction industry with the purchase of IronPlanet.

Construction Equipment Auction Leader Ritchie Bros. Acquires IronPlanet

Ritchie Bros. Auctioneers, the world’s largest industrial auctioneer has agreed to acquire IronPlanet, a leading online marketplace for used heavy equipment and other durable asset sales, for approximately $758.5 million, subject to customary closing adjustments.

IronPlanet, founded in 1999, complements Ritchie Bros.’ primarily end-user customer base, focusing primarily on the needs of corporate accounts, equipment manufacturers, dealers and government entities in equipment disposition solutions. IronPlanet conducts its sales primarily through online-only platforms, with weekly online auctions and in other equipment marketplaces. Ironplanet sold about $787 million of gross merchandise value through its sales channels during 2015, and has achieved a 25.2-percent compounded growth rate in assets sold from 2013 through 2015. The growth momentum has continued into 2016, with a 41-percent increase in GMV during the first half of 2016 compared to the first half of 2015.

Under the terms of the transaction, Ritchie Bros. will acquire 100 percent of the equity of IronPlanet for $740 million in cash and the assumption of unvested equity interests in IronPlanet subject to adjustment, which brings the transaction value to about $758.5 million. The total represents, a 13-times multiple of IronPlanet’s 2017 estimated adjusted EBITDA, inclusive of the $100 million net present value of tax synergies and $20 million in run-rate cost synergies. Ritchie Bros. intends to finance the transaction through a combination of cash on hand and new debt, and has bridge financing commitments from Goldman Sachs Bank USA subject to customary terms and conditions to facilitate the closing.

“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, Ritchie Bros. CEO. “Togethere 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. 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.”

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