At the same time, it has also done a deal with Caterpillar, an IronPlanet shareholder, to become its preferred global partner for live onsite and online auctions for used Cat equipment, complementing Caterpillar's existing dealer channels.
The price that Ritchie Bros has paid for IronPlanet is about the same as the gross merchandise value of equipment sold through its website last year. It also represents a 13-times multiple of IronPlanet's 2017 estimated adjusted EBITDA.
Founded in 1999, IronPlanet complements Ritchie Bros' primarily end-user customer base, as it focuses largely on the needs of corporate accounts, equipment manufacturers, dealers and government entities in equipment disposition solutions. It conducts its sales primarily through online-only platforms, with weekly online auctions and in other equipment marketplaces. Volvo Construction Equipment is also an IronPlanet shareholder.
"This transformative transaction is the logical next step for Ritchie Bros, building on our multi-channel platform, global reach and long-standing customer relationships,” said Ritchie Bros chief executive Ravi Saligram. "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 onsite or online. Our commitment to diversifying our offerings is directly in line with customer demand for multiple selling and buying solutions."