EUR 850.00 For Business Accounts Only

Morningstar | Ritchie Brothers Continues to Innovate After IronPlanet Integration

Ritchie Bros. Auctioneers is one of the largest sellers in the $300 billion used heavy-equipment market, with an estimated 1.5% share. It has established itself as the pre-eminent leader in the space by creating a vast international network of buyers and sellers. The company competes with several channels ranging from equipment dealers to other online auction houses. To offer a full spectrum of value as well as attract an array of buyers and sellers, the company has established 40 auction facilities across the globe in addition to websites. Today, nearly 50% of its auction lots are purchased by customers online. Following the market recovery around 2012, the number of sellers using the auctioneer’s facilities declined as buyers and sellers rationalized their asset bases from the prior peak’s years, demanding less new equipment. In turn, original-equipment manufacturers--to preserve their brand reputation and used-equipment resale values for their vast independent dealer networks--manufactured fewer products. We believe that this effectively reduced the demand for Ritchie Bros.' services as less supply of sought-after equipment entered into the market. Indeed, the company seemingly suffered from a lack of organic revenue growth. Ritchie Bros. is fighting these market forces by diversifying its product offerings and entering into partnerships with OEMs (Cat Auction Services). While the company has historically been a dealer of construction-related equipment, in recent years the company has expanded into other sectors. With nearly $900 million in acquisitions since 2015, Ritchie Bros. has entered used-equipment sales of other industries, such as oil and gas, agriculture, and mining. Augmenting these new market offerings, the company has also expanded in the online used-equipment industry through its acquisition of IronPlanet.