Executive Summary
Goindustry-Dovebid (GOI) provides asset management, valuation and auction services for industrial equipment. It was created by GoIndustry's can of DoveBid, its largest competitor, in 2008. It is the clear global market leader in the auction of surplus industrial machinery worldwide, though this remains a fragmented industry.
Company History
GoIndustry was founded in 1999, initially handling auctions mainly offline, and moving increasingly into online auctioneering. In 2008, it acquired its US based competitor DoveBid. GoIndustry was the largest and DoveBid the second largest in the surplus industrial machinery market.
Current Events
GoIndustry is currently involved in raising £ 4.5m from a rights issue, while revising terms for its convertible warrants.
Business Model
GoIndustry helps companies sell surplus industrial machinery and equipment, which can range from huge mining excavators to temporary generators. It holds monthly online auctions. It also helps companies carry out phased reductions in their asset bases over time, handling the asset sales. While its customers for these services are mainly large enterprises, GOI also helps financial institutions with valuations, especially for asset financing. Customers include business recovery and bankruptcy/insolvency advisers, as well as banks and finance houses.
GOI focuses on particular sectors - automotive, pharmaceuticals and biochemicals, and most recently, printing. Industries which are restructuring, or which are facing the need for companies to downsize, represent a major opportunity for GOI and the selection of the right markets is crucial to the company's growth. The main entry barrier is the knowledge of specialised assets - GOI is not involved in the office equipment market, which is not specialised and does not offer an advantage to the more knowledgeable trader.
Initially all auctions were handled live. Now, the majority of auctions (59%[1])are held online, which has enabled GOI to reduce its costs.
Revenue comes from three main sources, the main one being commission on auction sales, which accounts for £ 16.1m of revenue, up 45% in 2008. Fees are also charged on valuations and other work, accounting for £ 4.9m revenue last year, up 62%. The remaining, much smaller, source of revenue comes from GOI's trading as a principal, when it takes ownership of equipment that it then sells on. This accounted for only £ 2.2m last year, a 39% decrease.
Geographically, Europe and North America account for almost equal amounts of revenue, generating just over £ 16m each. However, North America contributed…
