Ritchie Bros. announces completion of acquisition and strategic investment
Ritchie Bros., has announced that it has completed its acquisition of the outstanding minority interest of Ritchie Bros. Financial Services, and has made a strategic investment in Machinio Corp. – a global search engine for finding, buying and selling equipment. These corporate development initiatives are expected to help position Ritchie Bros. for future growth and further extend our involvement in the digital innovation of the equipment industry.
"Ritchie Bros. Financial Services is an important component of our full-service offering, catering to the financing needs of equipment buyers – including those purchasing through Ritchie Bros. auctions and EquipmentOne, where financing permits more customers to bid with the power of cash. As we continue to execute on our financial services growth strategy, we expect to help more customers by further expanding our reach and penetration across all our current and future sales channels," said Ravi Saligram, CEO Ritchie Bros.
He continued, "Our investment in Machinio demonstrates our desire to find even more ways to support the equipment industry and serve the various needs of equipment owners. Machinio's scalable model uses innovative technologies to provide buyers with the widest assortment of equipment listings on the web, while also driving lead generation for equipment sellers."
Acquisition of the minority interest of Ritchie Bros. Financial Services
Ritchie Bros. is pleased to confirm that its previously announced acquisition of the outstanding 49% minority interest in Ritchie Bros. Financial Services ("RBFS") has now completed, for cash consideration of CAD$53.9 million (US$41.1 million). Additional compensation may be provided to the former shareholders of the minority interest, contingent upon certain operating performance targets being achieved over the next three years. Jim Case will continue leading the business as it executes its growth strategy.
In 2015, RBFS received more than US$1 billion of credit applications and facilitated US$222 million in equipment financing for Ritchie Bros. customers – representing 31 percent growth in funded loans compared to 2014, and 116 percent growth compared to 2013. RBFS acts as an intermediary with select lending partners to find financing solutions for customers purchasing equipment, including loans and lease-to-own programs. RBFS does not utilize Ritchie Bros. capital in its financing activities.
Investment in Machinio
As part of the Company's strategy of investing in equipment distribution channels, Ritchie Bros. has made a minority investment in Machinio Corp. – a global search engine for finding, buying and selling equipment. With more than one million items listed for sale, Machinio provides equipment buyers with the most comprehensive database of available used machinery covering construction, farming, metal working, processing, packaging, material handling, and woodworking equipment. Machinio receives over three million page views each month from more than 400,000 unique website viewers from 190 countries. Machinio also offers equipment sellers the ability to advertise equipment for sale directly on their site for a fee, and also offers superior ad placements to premium clients. Since May 2015, the company has quadrupled its number of premium clients.
Ritchie Bros. was the lead investor in a Series A round of financing, raising gross proceeds of $3.0 million for Machinio. All other terms of the minority investment are confidential. The investment is not considered to be material to Ritchie Bros.' financial results. Machinio, based in Chicago, continues to operate as an independent business that caters to the needs of all equipment buyers and sellers.