Vancouver-based Ritchie Bros. Auctioneers (TSX: RBA) plans to pay US$758.5 million for IronPlanet, an online, used heavy equipment marketplace.
IronPlanet was founded in 1999 and specializes in serving corporate accounts, equipment manufacturers, dealers and governments, and sells through online-only platforms.
Based in California, IronPlanet sold US$787 million in gross merchandise value in 2015. In the first half of 2016, sales were up 41% compared to the year-earlier period.
Ritchie says the transaction is the “logical next step for Ritchie Bros., building on our multi-channel platform, global reach and long-standing customer relationships.”
In response to the deal, Ritchie Bros. CEO Ravi Saligram stated that “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 on-site or online.”
The deal is expected to close by the first half of 2017.
The auctioneer has also announced an upcoming strategic alliance with heavy equipment manufacturer Caterpillar (NYSE: CAT), which begins upon closing of the IronPlanet deal. Caterpillar and its dealers hold a minority position in IronPlanet.
The deal would see Ritchie Bros. become Caterpillar’s preferred global partner for live on-site and online auctions for used Caterpillar equipment, for an initial five-year term.
“A key element of our digital strategy is connecting more products in our customers’ fleets, allowing us to help improve their productivity, increase safety and drive sustainability,” group president with responsibility for Caterpillar’s customer and dealer support Rob Charter said. “This alliance will ensure that more used equipment buyers have access to our best-in-class products, digital offerings and world-class customer support.”
Ritchie Bros. was established in 1958 in Kelowna, British Columbia. With operations in 19 countries and 45 auction sites worldwide, the firm is the world’s largest industrial auctioneer, and one of the largest sellers of used industrial equipment used in mining, forestry, construction and other sectors.