REG - Auction Technology - Acquisition

Auction TechnologyAnnouncement

07/02/2023 07:00

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RNS Number : 0806P  Auction Technology Group PLC  07 February 2023

AUCTION TECHNOLOGY GROUP PLC

 

ACQUISITION OF ESTATESALES.NET

 

 

London, United Kingdom, 7 February 2023 - Auction Technology Group plc ("ATG",
"the Company", "the Group") (LON: ATG), operator of world- leading
marketplaces for curated online auctions, is pleased to announce the
acquisition of Vintage Software LLC (the "Acquisition"), trading as
estatesales.net ("ESN"), a leading US estate sales listing site.

 

Background

Based in Jackson, Missouri, ESN provides a platform to facilitate estate sales
across the US. Both corporate estate sale companies as well as private
customers use ESN to advertise online the sale of millions of unique
second-hand items sourced from a range of events including private home estate
sales and business liquidations.

 

Approximately 58% of revenue is derived from ESN's over four thousand monthly
listing subscribers, with the remaining 42% from other fees, which
predominantly includes traditional pay per listing fees.  The website
attracts over three million monthly site visitors, as well as over one million
email subscribers, who are primarily buyers looking to discover unique items
for sale at local estate sale events.  Three quarters of all listings relate
to in-person sales, with the remaining predominantly sold through third-party
online auction sites.  ESN also has a nascent marketplace capability with
over 125,000 items sold in 2022 directly through the site.  ESN was founded
by the McQuade family and launched under its current name in 2002.  Today,
the company is run by Micky McQuade, and prior to the Acquisition was wholly
owned by the McQuade family.

 

 

Rationale for the Acquisition

·      The Acquisition expands ATG's immediately addressable market into
the growing and fragmented US estate sales market, which had an estimated
gross merchandise value of $5bn(1) in 2022.

·     Consistent with ATG's strategy, this represents a strong entry point
into an attractive adjacent channel for the resale of second-hand items and is
consistent with ATG's purpose to accelerate the growth of the circular
economy.

·      ESN is a market leader in an industry vertical at the start of its
digital transformation.

·      ESN's seller and buyer bases are highly complementary and
synergistic to ATG, providing the opportunity to drive more buyer traffic to
ATG's marketplaces, convert browsers of ESN to online auctions and enable
sellers to cross-list across multiple ATG marketplaces.

·      The acquisition also provides the potential to leverage ATG's
existing marketplace technology, experience and value-added services to
customers of ESN and grow the online estate sales marketplace offering.

 

1.        Management estimates January 2023

 

Financial consideration

The Acquisition purchase price is $40 million with an initial cash payment of
$30 million plus deferred cash consideration of $10 million payable after
twelve months. A total of up to $2 million employee retention bonus will also
be payable after 12 months to certain employees of ESN. The acquisition will
be funded from the Group's available cash balance and existing debt
facilities.

 

For the year ended 31 December 2022, ESN unaudited revenue was $8.7 million,
with an unaudited EBITDA of $4.7 million and unaudited gross assets of $1.3
million.  Revenue has grown at a c.9% CAGR since 2019.  The Board expects
the acquisition to be accretive to the Group's adjusted earnings and adjusted
EBITDA in the current financial year.

 

ATG also confirms its full year guidance provided at the FY 22 Results in
December 2022, before the impact of today's announcement.

 

John-Paul Savant, Chief Executive Officer of Auction Technology Group plc,
said:

"As a leading US estate sale listing site, estatesales.net is a natural fit
for ATG as we unlock further areas of value within the secondary goods market
and facilitate another part of the circular economy.  We are excited by the
multiple growth opportunities ahead, including enabling more sellers of unique
and specialised secondary items to cross-list across multiple marketplaces and
gain access to a larger pool of bidders and buyers, as well as the opportunity
to develop ESN into the leading online estate sales platform in the US.  We
look forward to welcoming Micky and the estatesales.net team into ATG."

 

For further information, please contact:

 ATG
 For investor enquiries, Rebecca Edelman  rebeccaedelman@auctiontechnologygroup.com
                                          (mailto:rebeccaedelman@auctiontechnologygroup.com)
 For media enquiries                      press@auctiontechnologygroup.com (mailto:press@auctiontechnologygroup.com)

 Tulchan Communications                   +44 207 353 4200
 (Public relations advisor to ATG)        ATG@tulchangroup.com (mailto:ATG@tulchangroup.com)
 Tom Murray, Matt Low, Arthur Rogers

 

 

About Auction Technology Group plc

Auction Technology Group plc ("ATG") is the operator of world leading
marketplaces and auction services for curated online auctions, seamlessly
connecting bidders from around the world to around 3,800 trusted auction
houses across two major sectors: Industrial & Commercial ("I&C") and
Art & Antiques ("A&A").

 

The Group powers seven online marketplaces using its proprietary auction
platform technology, hosting in excess of 70,000 live and timed auctions each
year. ATG has been supporting the auction industry since 1971 and the
Company has offices in the UK, US and Germany.

 

CAUTIONARY STATEMENT The announcement may contain forward-looking statements.
These statements may relate to (i) future capital expenditures, expenses,
revenues, earnings, synergies, economic performance, indebtedness, financial
condition, dividend policy, losses or future prospects, and (ii) developments,
expansion or business and management strategies of the Company.
Forward-looking statements are identified by the use of such terms as
"believe", "could", "should", "envisage", "anticipate", "aim", "estimate",
"potential", "intend", "may", "plan", "will" or variations or similar
expressions, or the negative thereof. Any forward-looking statements contained
in this announcement are based on current expectations and are subject to
known and unknown risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by those statements. If one
or more of these risks or uncertainties materialise, or if underlying
assumptions prove incorrect, the Company's actual results may vary materially
from those expected, estimated or projected. No representation or warranty is
made that any forward-looking statement will come to pass. Any forward-looking
statements speak only as at the date of this announcement. The Company and its
directors expressly disclaim any obligation or undertaking to publicly release
any update or revisions to any forward-looking statements contained in this
announcement to reflect any change in events, conditions or circumstances on
which any such statements are based after the time they are made, other than
in accordance with its legal or regulatory obligations (including under the UK
Listing Rules and the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority). Nothing in this announcement shall exclude any
liability under applicable laws that cannot be excluded in accordance with
such laws.

 

LEI Number: 213800U8Q9K2XI3WRE39

 

 

 

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