< PreviousTHE ACQUIRER R itchie Bros.’ has a history of making strategic acquisitions for geographic expansion and digital transformation. Since 1999, the global auctioneer has acquired over ten rival companies and service providers in North America and Europe, which has enabled Ritchie Bros. to off er multichannel platforms and accelerate its transition to an end-to-end asset management and disposition solutions provider. Prior to the Euro Auctions’ deal, Ritchie Bros.’ largest acquisition was IronPlanet in 2017, worth approximately $758.5 million. The company’s most recent acquisition before Euro Auctions was Rouse Services, a leading provider of data intelligence and performance benchmarking solutions. The acquisition of Euro Auctions marks a new era for Ritchie Bros., giving the company unprecedented market dominance in the EMEA region and a monopoly in several international markets. 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 £775 million (approximately US$1.08 billion) in cash. This represents an implied multiple of ~15.3x 2021E EBITDA (non-GAAP measure), including run rate synergies. The transaction was approved by the board of directors of Ritchie Bros. and is expected to close in late 2021 or early 2022, subject to regulatory clearances and the satisfaction of other customary closing conditions. Ritchie Bros. intends to fi nance the transac- tion through a combination of cash on hand COVER STORY 20 PLANT / MACHINERY / VEHICLESwww.plantmachineryvehicles.comSEPTEMBER 2021and new debt; and has bridge fi nancing com- mitments from Goldman Sachs Bank USA, subject to customary terms and conditions to facilitate the transaction close. Following the close of the transaction and the required fi nancing, Ritchie Bros. is expected to have an adjusted net debt to adjusted EBITDA ratio (non-GAAP measure) of approximately 3.9x. Ann Fandozzi, CEO, Ritchie Bros., com- mented: “Ritchie Bros. and Euro Auctions are an ideal fi t with a united goal to make asset insights, service off erings and disposition solutions easier than ever. 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 acqui- sition signifi cantly 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.” Ritchie Bros. announced it will be retaining Euro Auctions employees and its brand, both of which are highly regarded in the EMEA region. Ritchie Bros. has secured employment arrangements with key management of the Euro Auctions business, including Derek Keys, who will continue to be involved for a mini- mum of three years post-closing. It is intended that Jonnie Keys will assume a senior leader- ship position, and Lynden and Trevor Keys will be retained as sourcing leads. Derek Keys, founder and director, Euro Auc- tions, said: “Dave Ritchie and his brothers were a big inspiration for my brothers and I in the creation of Euro Auctions. We modelled much of what we do off Dave’s customer-centric phi- losophy, 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.” RITCHIE BROS.’ HISTORY OF ACQUISITIONS Ann Fandozzi, CEO, Ritchie Bros. COVER STORY 21 PLANT / MACHINERY / VEHICLESwww.plantmachineryvehicles.comSEPTEMBER 2021 1999FORKE BROTHERS, USA 2002ALL PEACE AUCTIONS, CANADA 2004LEBLANC AUCTION SERVICE, CANADA 2006DENNIS BILISKE AUCTIONEERS, USA 2007CLARKE AUCTIONEERS, CANADA 2009MARTELLA AUCTION COMPANY, USA 2016PETROWSKY AUCTIONEERS, USA 2016KRAMER AUCTIONS, CANADA 2016MASCUS, NETHERLANDS 2017IRONPLANET, USA 2018LEAKE AUCTION COMPANY, USA 2020ROUSE SERVICES, USA 2021-22EURO AUCTIONS, NORTHERN IRELANDSTRATEGIC RATIONALE FOR THE ACQUISITION R itchie Bros. (NYSE and TSX: RBA), established in 1958, off ers customers end-to-end solutions for buying and selling used heavy equipment, trucks and other assets. Operating in a number of sectors, including construction, transportation, agriculture, energy, oil and gas, mining, and forestry, the company’s selling channels include: Ritchie Bros. Auctioneers, the world’s largest industrial auctioneer off ers live auction events with online bidding; IronPlanet, an online marketplace with featured weekly auctions and providing the exclusive IronClad Assurance equipment condition certifi cation; Marketplace-E, a controlled marketplace off ering multiple price and timing options; Mascus, a leading European online equipment listing service; and Ritchie Bros. Private Treaty, off ering privately negotiated sales. The company’s suite of solutions also includes Ritchie Bros. Asset Solutions and Rouse Services LLC, which together provides a complete end-to-end asset management, data-driven intelligence and performance benchmarking system. Ritchie Bros. also off ers sector-specifi c solutions including GovPlanet, TruckPlanet, and Kruse Energy, plus equipment fi nancing and leasing through Ritchie Bros. Financial Services. Euro Auctions, founded in 1998, conducts unreserved heavy equipment auctions with Gross transactional value (2019–20). Service revenue (auction and marketplaces). RITCHIE BROS. FINANCIAL OVERVIEW (SOURCE: Q4 2020 EARNINGS REVIEW AND UPDATE) onsite and online bidding under the brands Euro Auctions and Yoder & Frey, with 200+ employees in 14 countries. In 2020, the company conducted 60 auc- tions, selling close to 90,000 items for £484+ million across its nine locations in the United Kingdom, Ireland, Germany, Spain, the United Arab Emirates, Australia, and the United States. Similar to Ritchie Bros., Euro Auc- tions also sells items through a timed auction format and a daily marketplace with ‘Buy Now’ and ‘Make Off er’ options. COVER STORY 22 PLANT / MACHINERY / VEHICLESwww.plantmachineryvehicles.comSEPTEMBER 2021 Hammer value: geographic mix (2020). Hammer value: sector mix (2020). Hammer value. Total revenue. EURO AUCTIONS BUSINESS OVERVIEW (SOURCE: INVESTOR PRESENTATION BY RITCHIE BROS.) EURO AUCTIONS FINANCIAL OVERVIEW (SOURCE: INVESTOR PRESENTATION BY RITCHIE BROS.) The acquisition of Euro Auctions will further establish Ritchie Bros. as the trusted global marketplace for insights, service, and trans- action solutions for commercial assets, while achieving the following strategic goals. • Accelerate Ritchie Bros.’ growth interna- tionally and create a true global marketplace: Euro Auctions is a complementary brand to expand Ritchie Bros.’ global footprint and access to equipment while also tapping into new revenue streams, as Euro Auctions has considerable presence across Europe and the Middle East. This combination will also off er unprec- edented and diversifi ed choice to customers around the world, facilitating better price discovery and more equipment selection. • Accelerate inventory management system adoption: Ritchie Bros. suite of tools and digi- tal services will unlock value for Euro Auctions customers post acquisition, providing a more robust off ering for customers. Tools and services include a free business inventory management system from RB Asset Solutions, data analytics tools like Market Trends and RB Asset Valuator, fi nancing from Ritchie Bros. Financial Services, as well as shipping, insurance, warranties, refurbishing, and inspection services. • Expand the global platform for at-risk consignment: The combined entity will be able to leverage industry best practices and decades of expertise, while providing access to more capital to quickly off er robust at-risk consign- ment options for customers globally, regardless of transaction size. Goldman Sachs & Co. LLC is serving as exclusive fi nancial advisor to Ritchie Bros.; Norton Rose Fulbright LLP and Skadden, Arps, Slate, Meagher & Flom LLP are serving as legal advisors; and KPMG LLP is serving as accounting, tax and IT advisor. Jeff eries International Limited is serving as fi nancial advisor to the vendors of Euro Auctions, and A&L Goodbody LLP as legal advisor. COVER STORY 23 PLANT / MACHINERY / VEHICLESwww.plantmachineryvehicles.comSEPTEMBER 2021expertise of Euro Auctions in sourcing equip- ment to accelerate the disposition process, while Euro Auction customers will be able to enjoy the Ritchie Bros.’ suite of expanded services and capabilities for an improved asset management experience.” Ritchie Bros. expects strong demand and pricing for used machinery and equipment at its Dubai auctions and yard. As is the case in Europe, a growing number of equipment buy- ers in the Middle East are experiencing longer lead times on the delivery of new equipment, largely due to delays resulting from COVID-19 lockdowns and a range of ongoing supply chain issues. This is where online auctions such as those organised by Ritchie Bros., are helping equipment buyers, since machinery and heavy equipment inventory listed in online auctions are immediately available and can be shipped without delay. In the fi rst quarter of 2021, Ritchie Bros. global website traffi c was up 47% year over year, while bidder registrations were up 49%. Increased buyer activity can be attributed to the fact that auctions provide quick access to work-ready equipment. “Our Dubai quarterly online timed auc- tion held in June 2021 set three new company records including the highest number of reg- istered bidders – a 26% increase over the same auction last year, as well as the highest number of new bidders and new buyers ever. These record online auction results are proof of wide- spread customer acceptance of online auctions and evidence they can be an eff ective solution to mitigate the eff ects of pandemic lockdowns,” says Eduard. “Sellers no longer need to wait until our quarterly online auctions to consign their equipment if they want to sell their equipment more quickly and for a set price. Our reserved 24/7 online marketplace, Marketplace-E, is an excellent example of an everyday asset disposition solution which provides sellers with control over price,” he adds. The partnership between Ritchie Bros.’ Middle East and Africa and Q8 Auctions, a divi- sion of Kuwait-based Masaha Global, follows the Ritchie Bros. pivot in March 2020 from live in-person auctions to an entirely online TOGETHER, WE WILL INTRODUCE GREATER GLOBAL LIQUIDITY FOR OUR SELLERS AND PROVIDE ACCESS TO A WORLDWIDE SELECTION OF USED EQUIPMENT FOR OUR BUYERS R itchie Bros. is planning to hold four quarterly online auctions in 2022, as is usually the case, and these are planned for March, June, September, and December. Ritchie Bros.’ next quarterly online timed auction in Dubai, featuring hundreds of equipment items for sale, will take place this September. Bidding opens on September 21, 2021, and ends at staggered times on September 28 and 29, 2021. “It’s business as usual for now,” says Eduard Faig, regional sales manager at Ritchie Bros. Middle East, India and Africa. We are forming an integration planning team with colleagues from both organisations. The intent of this team is to better understand how to bring the greatness of both organisations together, putting the customer fi rst, with unmatched selection for buyers and unprecedented solu- tions for sellers to drive the very best outcome for equipment around the world. Together, we will introduce greater global liquidity for our sellers and provide access to a worldwide selec- tion of used equipment for our buyers. Ritchie Bros.’ customers will be able to experience the Eduard Faig, regional sales manager at Ritchie Bros. Middle East, explains how the acquisition of Euro Auctions will aff ect the Dubai auctions calendar for 2022 and how new formats, partnerships and services will drive growth in the MEA region. Eduard Faig, regional sales manager at Ritchie Bros. Middle East. COVER STORY 24 PLANT / MACHINERY / VEHICLESwww.plantmachineryvehicles.comSEPTEMBER 2021auction format, a transition accelerated due to pandemic lockdowns. Faced with border closures and travel restric- tions, Q8 Auctions had to quickly implement a new online selling method since buyers were unable to fl y into Kuwait City for an extended period. As part of the long-term agreement, Ritchie Bros. provides its range of multichannel online auction solutions and access to a global audience of buyers to Q8 Auctions. In return, Q8 Auctions provides on-the-ground customer assistance and access to its extensive network of buyers and sellers throughout Kuwait. At Ritchie Bros.’ Dubai auction in June 2021, 322 pieces of Kuwait-based equipment including generators, light towers, trucks, cranes, wheel loaders, and ADTs were sold to buyers across the region. Particularly strong performing cat- egories at the auction were truck tractors, wheel loaders, rough terrain cranes and water trucks. “Our partnership is a good example of how companies in this region can collaborate to create mutually benefi cial solutions not only to address challenges brought on by the pandemic, but also to provide local business owners with more eff ective and borderless disposition services. We’re pleased that the power of Ritchie Bros.’ online timed auction format and global distribution could be brought to this deal. At the same time, this partnership presents an opportunity for Kuwait-based equipment own- ers to dispose of surplus machinery without having to ship equipment to Dubai. Items sold from Kuwait are stored at Q8 Auction’s Kuwait City yard, where inspection reports can be made for listing on Ritchie Bros. high-traffi c website. Once sold, items can be shipped directly to buyers anywhere in the world, reduc- ing transport costs. Rethinking and teaming up with others has added value for our customers around the world” says Eduard. Ritchie Bros. continues to introduce new features to its website and online auction off ering, as well as new products and services that can help both buyers and sellers. Recently, the company introduced a fi nancing option in co-operation with Emirates NBD Bank, which is available on selected equipment for UAE- based buyers. Ritchie Bros. is also expanding its Arabic language support with an online auction website in Arabic and a team of Arabic speaking territory managers. Ritchie Bros. auction site in the Jebel Ali Free zone in Dubai. COVER STORY 25 PLANT / MACHINERY / VEHICLESwww.plantmachineryvehicles.comSEPTEMBER 2021NEW PRODUCTS, AFTERSALES SUPPORT AND RENTAL OPTIONS HELP WIDEN AL-BAHAR’S CUSTOMER BASE IN ROAD CONSTRUCTION ROAD CONSTRUCTION 26 PLANT / MACHINERY / VEHICLESwww.plantmachineryvehicles.comSEPTEMBER 2021U tility compactors, single drum vibratory compactors, pavers, tandem vibratory rollers and pneumatic tyre rollers are among the most widely used equipment for road construction projects in the GCC. These equipment constitute the fl eets of every major road construction contractor involved in building new roads, highways, parking lots, and airport runways or expanding new lanes alongside existing roads. Cold planers and rotary mixers are used extensively for road maintenance works such as milling/surface texturing of highways, urban streets and airport runways as well as soil stabilization and asphalt reclamation. Product upgrades and new features of asphalt pavers, compactors, cold planers and road reclaimers continue to improve machine performance, manoeuvrability, and comfort, leading to increased productiv- ity and effi ciency of road construction and maintenance jobs. In particular, these fea- tures can be found in Caterpillar equipment such as the new GC series of single drum vibratory compactors; PM6xx, PM3xx, and PM8xx series of cold planers and the new RM400 rotary mixer, available in the region through Al-Bahar, the exclusive dealer of Cat branded heavy equipment in UAE, Kuwait, Bahrain, Oman and Qatar. The 11-ton CS11 GC vibratory soil compac- tor, for instance, is the most common size in the GCC markets. Features of the CS11 GC include high weight at the drum and high amplitude delivering superior compaction performance; pod-style vibratory system and sealed-for-life hitch bearing. The standard Eco-mode reduces fuel consumption, and the Cat engine provides ample power and consistent performance. The PM620 cold planer with its 2.0m rotor is the most common size in the GCC markets. Features of the PM620 include a powerful 470 kW (630 hp) Cat engine; automatic load control, which senses load changes on the rotor system load and adjusts propel speed to prevent stalls and optimize production; ergonomic controls with user- friendly touchscreen LCD display; cutting system with new Cat System K rotors; highly precise Cat Grade Control system; high manoeuvrability and ease of service. Features of RM400 road reclaimer and rotary mixer include modern controls that simplify operation; rotor drive system that allows changing rotor speeds without hav- ing to stop the machine; and diff erent rotor options for a variety of reclamation and stabilization projects. Ali Abu Hirra, product manager–paving and worktools, Al-Bahar, says: “Our strategy is to widen the base of our road construction customers, and therefore, we will continue introducing new products to the market, equipped with all the features needed to help customers achieve their production and quality goals with less ownership and operating costs. Investing in new machines could be challenging for some contractors, especially under the current market conditions. This has made equipment rental an alternative solution for several contractors. For example, utility compactors and single drum vibratory compactors represent a big portion of the rental market for road construction machin- ery. We will also keep focusing on aftersales support by off ering diff erent solutions, i.e. customer value agreements to meet and exceed customer expectations when dealing with Al-Bahar.” ROAD CONSTRUCTION 27 PLANT / MACHINERY / VEHICLESwww.plantmachineryvehicles.comSEPTEMBER 2021D ynapac has developed an electric tandem roller in collaboration with its customer, Skanska, in Sweden. The new machine, which is currently undergoing fi eld-testing, is designed to compete in the 1.5 tons tandem vibratory roller class. It features a drum width of up to 1.0 meters, develops a centrifugal force of 16.7 kN, a nominal amplitude of 0.4 mm, and a static linear load (front/rear) of 6.1/ 7.9 kg/cm. Unlike the diesel fuelled model upon which it is based, the new CC900 e tandem vibratory roller produces zero emissions at the point of operation. Weighing in at 1.6 tons and with an oper- ating width of 0.8 to 1.0 meters, the CC900 e double-drum vibratory roller has been designed to meet the specifi c demands of utility contractors and rental fl eet opera- tors alike. It delivers the same linear load, amplitude, frequency and travel speed as the diesel-powered model. Fredrik Åkesson, application specialist - compaction, Dynapac, said: “We have seen electric and battery power being applied to mini excavators, skid-steer loaders, access equipment and site dumpers. And these have been widely welcomed by forward- thinking and environmentally-aware rental fl eet operators and contractors. The only thing missing has been an electric-powered tandem vibratory roller to run alongside these other zero emissions machines. With the development of the CC900 e, Dynapac has taken a massive technological step. We are proud to be the fi rst realizing this from a concept machine into something we now have on the fi eld.” The CC900 e has been in development for more than two years and involved a 20-person research and development team. From the very beginning of the research and development phase, Skanska has reviewed specifi cations and prototype machines. The battery system has been subjected to rigorous testing to ensure that it meets the specifi c needs of the compaction equipment sector and is capable of withstanding the vi- bration generated by the roller. During that testing, prototype machines have clocked a massive amount of hours in operation. An- other Dynapac customer, Loxam, will start fi eld-testing of the CC1000 e model within a few weeks. Fredrik said, “Co-operation is the key to developing a successful product and direct user input is incredibly valuable to a project of this kind. From the user perspective, it is equally important to be acquainted with the equipment at an early stage. Even though DYNAPAC DEVELOPS ELECTRIC TANDEM ROLLER AND ASPHALT PAVER IN COLLABORATION WITH CUSTOMERS Dynapac developed the electric tandem roller in collaboration with its customer, Skanska, in Sweden. ROAD CONSTRUCTION 28 PLANT / MACHINERY / VEHICLESwww.plantmachineryvehicles.comSEPTEMBER 2021the compaction performance is unchanged, there are still small changes that have to be the work procedures when transitioning from traditional fossil fuel to electric power. The earlier operators can be exposed to those changes, the easier it will be to adapt to the new equipment.” ELECTRIC ASPHALT PAVER Dynapac is conducting pilot tests of its all-electric asphalt paver in the Netherlands, in collaboration with KWS, the contracting division of VolkerWessels; Urban Mobility Systems, a specialist in the electrifi cation of vehicles; and Van der Spek, Dynapac’s dealer in the Netherlands. The development of the electric asphalt paver was accelerated by Gebr. Van Kessel, the VolkerWessels division that won the con- tract for the construction of the Innovation Lane A58 Kloosters, a part of the InnovA58 road widening project in the Netherlands. Axel Mooren, vice president, pavers busi- ness unit, Dynapac, said: “We are very proud to participate in the electrifi cation of our SD2500CS fi nishing machine, together with our customer KWS and our partners VDS and UMS. This project fi ts perfectly in our strategic Z.ERA programme, in which we reduce emissions step by step for each of our products, without having to compromise on our performance.” Lars Kool, director, UMS, said: “We think it is fantastic that KWS is a launching cus- tomer for this fi rst electric asphalt spreader. There is great interest in electrifi cation of this machine worldwide. The application and environmental factors are challenging but our expectations and ambitions are high. For the battery pack we use cells based on LFP chemistry without cobalt. These are safer, 100% recyclable and do not use scarce raw materials. All in all, a unique product.” KWS is testing the electric asphalt paver on the Innovation Lane A58 Kloosters project, which will provide the feedback Dynapac needs for series production of the paver. KWS announced that the electric paver will be fully deployed on its projects by 2022, after employing it on a number of test projects this year. Raymond van de Stadt, director, KWS, said: “As a road construction contractor, we are investing in electromobility to stay ahead of the curve. This year, we started using an electric roller for compaction. The bold decision to develop the spreader led to the an electric production model by combining the knowledge and expertise of UMS, Van der Spek and Dynapac.” Dynapac is conducting pilot tests of its all-electric asphalt paver in the Netherlands, in collaboration with KWS, the contracting division of VolkerWessels. ROAD CONSTRUCTION 29 PLANT / MACHINERY / VEHICLESwww.plantmachineryvehicles.comSEPTEMBER 2021Next >