How Ritchie Bros. maximized efficiency and returns supporting a major restructuring

As part of a strategic restructuring, Artera, a leading U.S. provider of integrated essential and critical infrastructure services, made the decision to cease operations of their utility service company, Volt Power LLC. Volt Power operated throughout the southern U.S., providing repair and installation of electrical utility infrastructure.

AlixPartners, a global consulting firm supporting Artera through their restructuring process, approached Ritchie Bros. on Artera’s behalf as a potential disposition partner. AlixPartners had had great success partnering with Ritchie Bros. in a previous disposition for another company, and knew Ritchie Bros. had the proven ability to plan and manage the sale, and the transaction solutions and reach to maximize returns.

3,000+ assets scattered across multiple states

While many large dispositions are centralized events, the 3,000+ Volt Power assets were located across multiple states. As a result, there were numerous logistical and administrative challenges associated with a dispersal where the both the number of assets and geographic area was a considerable sizes. In addition, numerous assets were being leased or financed at the time, which meant they couldn’t be sold until those contracts were fulfilled or bought out.

And the 3,000+ assets, although spread across a large area of the U.S. and many still in use in the early stages of the dispersal process, would have to be accurately appraised to provide Artera with market values. They would then need to be transported to secure storage locations, prepared for sale, and finally marketed and sold via a variety of transaction solutions on the North American market.

This was a complex situation with multiple pain points for Artera. In order to remove those pain points and successfully complete such a large dispersal, the company required the capabilities, experience, financial strength, and expertise that only Ritchie Bros. has.

How Ritchie Bros. tackled the challenges

The first step in the process was to appraise all the assets to provide accurate market values and selling price goals. Rouse Services, a Ritchie Bros. company and the industry leader in equipment appraisal and valuation, executed a comprehensive appraisal drawing from their repository of fleet and sales transaction data, the largest and most up-to-date in the industry.

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Rouse was able to provide accurate FLV (Forced Liquidation Value) numbers, and based on past dispersals and the returns achieved, showed that Artera could enjoy prices closer to OLV (Orderly Liquidation Value/Wholesale) when selling with Ritchie Bros.

Artera was confident in Ritchie Bros.’ ability to achieve higher returns, and Ritchie Bros. teams kicked into high gear, with almost every department involved in supporting the dispersal – from finance operations, legal, and marketing to yard operations, search & settlement, and inside sales.

With its financial strength and stability, Ritche Bros. was able to buy out the Volt assets that were under lease and financing agreements so they would be free and clear to sell. And with expertise in logistics, Ritchie Bros. was able to assist in transporting the Volt assets to its local yards and auction sites for secure storage, as well as providing storage insurance. Taking full care, custody and control of the assets gave Ritchie Bros. the opportunity to fully prepare them for sale, while removing a major pain point for Artera.

Once in the yards, Ritchie Bros. operations employees worked on de-identifying and decommissioning the assets (removing Volt logos, license plates, GPS units etc.), then inspecting and photographing items in order to list them on Ritchie Bros. websites. Ritchie Bros. teams also ensured all assets had clear titles and were lien-free for potential buyers.

The selling strategy & execution that ensured success

Ritchie Bros. planned and executed a carefully-structured and measured approach to selling the assets, cascading them through multiple transaction solutions in order to maximize returns, starting with selling via Private Treaty with a branded storefront on one of Ritchie Bros. websites to host and market the equipment. Some items not sold via Private Treaty were then cascaded to Marketplace-E, Ritchie Bros. 24/7 online Buy Now/Make Offer marketplace. The remaining assets were sold at Ritchie Bros. live unreserved auction events across the southern U.S.

All told, Ritchie Bros. successfully sold 3,000+ Volt assets for US$130 million. The mix of equipment sold included:

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The large assets included 890+ items (37%) sold via private treaty, 35+ items sold via Marketplace-E, and 1,450+ items sold via Ritchie Bros. live auction events. Hundreds of other smaller assets (tools, supplies, etc.) were also sold at live auction events.

This dispersal leveraged every aspect of Ritchie Bros.’ full range of service offerings, including their global multichannel marketing campaigns and unmatched ability to drive buyer demand. The company’s reach, marketing capabilities, and ability to coordinate the sale of 3,000+ assets in a relatively short time took pressure off the client, made the process easy for them, and maximized their returns.

Interested in selling with Ritchie Bros.? Contact us today.

See also

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