Ritchie Bros. and Europe’s leading plant and machinery auction house, Euro Auctions, have announced that Ritchie Bros. will acquire Euro Auctions group for an enterprise value of approximately US$1.08 billion.
Founded in 1998, Euro Auctions conducts heavy equipment auctions under the brands Euro Auctions and Yoder & Frey, with 200+ employees in 14 countries.
In 2020 the company conducted 60 auctions, selling close to 90,000 items for over USD$670 million across its nine locations in the United Kingdom, Northern Ireland, Germany, Spain, the United Arab Emirates, Australia and the United States.
Euro Auctions uses a similar system to Ritchie Bros., selling items through a timed auction format and a daily marketplace with immediate purchase and bidding options.
“Ritchie Bros. and Euro Auctions are an ideal fit with a united goal to make asset insights, service offerings and disposition solutions easier than ever,” said Ann Fandozzi, Ritchie Bros. CEO.
“Euro Auctions has an incredibly talented team, with expertise in asset sourcing, auction operations, sales, and customer service. Their ‘can do’ attitude and entrepreneurial spirit combined with technology has helped them adapt and grow, in much the same way as we have. This acquisition significantly accelerates our strategy to drive revenue and earnings growth and add shareholder value by continuing to expand our capabilities in new channels, sectors, regions, and customer segments.”
Euro Auctions Founder and Director Derek Keys added, “Dave Ritchie and his brothers were a big inspiration for my brothers and I in the creation of Euro Auctions. We modeled much of what we do off Dave’s customer-centric philosophy, which still runs through Ritchie Bros. today. Bringing us together will drive value for customers, as we provide more equipment, solutions, and services to the many industries and regions in which we operate.”
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Strategic rationale
This acquisition looks to further establish Ritchie Bros. as a trusted global marketplace. Customers should be able to look forward to better price discovery and increased equipment selection. With Euro Auctions’ presence in Europe and the Middle East, Ritchie Bros.’ international footprint will grow immensely due to this momentous acquisition.
Ritchie Bros. suite of tools and digital services will potentially unlock value for Euro Auctions customers. These tools and services include a free business inventory management system from RB Asset Solutions, data analytics tools like Market Trends and RB Asset Valuator, financing from Ritchie Bros. Financial Services, as well as shipping, insurance, warranties, refurb, and inspection services.
The combined entity hopes to be able to leverage their proven practices and years of equipment expertise and experience, while providing access to more capital in order to quickly offer robust consignment options for customers, regardless of transaction size.
Terms of transaction
Under the terms of the transaction, Ritchie Bros. will acquire 100% of the equity of the companies comprised within the Euro Auctions group for an enterprise value of approximately US$1.08 billion in cash.
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 of the transaction.
Ritchie Bros. has employment arrangements with key management of the Euro Auctions business, including Derek Keys, who will continue to be involved for a minimum of three years post-closing.
It is said that Jonnie Keys will assume a senior leadership position, and Lynden and Trevor Keys will be retained as sourcing leads.
Approval of this transaction has been confirmed by Ritchie Bros.’ Board of Directors and it is expected to officially close in late 2021 or early 2022, pending regulatory clearances and satisfaction of other customary closing conditions.
