Contact: Scott Denne
Ritchie Bros. Auctioneers’ $759m reach for heavy-equipment commerce site IronPlanet marks the latest technology deal by a non-tech acquirer. Today’s acquisition helps demolish previous records of non-tech buyers in the tech market. According to 451 Research’s M&A KnowledgeBase, such shoppers have spent $33.7bn since the start of the year, more than $4bn over any other full year since 2006.
Not only are non-tech acquirers paying more, the strategy behind their transactions is changing. With the acquisition of IronPlanet, Ritchie hopes to bring in new customers with different preferences for buying and selling heavy equipment. IronPlanet offers a mix of white-label websites for dealers, different auction formats and additional partnerships that Ritchie doesn’t have today. What it isn’t obtaining is an online presence. More than half of Ritchie’s auction proceeds already come through online sales.
That same dynamic – the desire to reach a new set of customers via a technology acquisition – was also a driver of deals earlier this summer. Walmart’s $3.3bn purchase of Jet.com and Unilever’s $1bn pickup of Dollar Shave Club were both targeted at opening new market segments to those companies. Compare that with earlier non-tech transactions in the retail space, such as Nordstrom’s acquisition of HauteLook ($180m) in 2011 and Walgreen’s purchase of Drugstore.com ($429m) that same year. Both of those deals aimed to provide a new channel of services for customers already served by those retailers. Non-tech acquirers are moving from defense to offense, and spending more in the process.
Source: 451 Research’s M&A KnowledgeBase
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