Liquidity Services acquires Machinio for $20M in cash and stock deal
Liquidity Services today announced it has acquired Machinio Corp., a global online platform for listing used equipment for sale in the construction, machine tool, transportation, printing and agriculture sectors. Machinio operates a robust online equipment listing marketplace, with over 1.2M assets for sale, valued at over $25B, and 10M annual website visits across 190 countries. Machinio also provides equipment sellers with a suite of online analytics tools and software solutions to optimize their business performance. Machinio customers will benefit from Liquidity Services' global equipment industry experience and network of over three million registered buyers, providing further global exposure for Machinio's equipment listings. Liquidity Services has paid approximately $20M of consideration for 100% of the equity in Machinio, consisting of approximately $18M in cash, subject to working capital adjustments under the terms of the stock purchase agreement, and $2M in restricted stock issued to Machinio's executives in exchange for stock in Machinio. The net cash portion of the purchase price is estimated to be $16.7M, net of the estimated cash assumed in the transaction and a working capital adjustment. Additional cash consideration, totaling no more than $5M, may be paid based upon Machinio's achievement of certain financial targets in calendar year 2019. In connection with the acquisition, Liquidity Services has also agreed to issue restricted stock valued at approximately $5M to Machinio's executives and employees. The restricted stock will be subject to performance-based vesting, based upon the achievement of certain annual revenue and adjusted EBITDA targets through calendar year 2021, in each case subject to each employee's continued employment with Liquidity Services on such vesting dates and other standard terms and conditions set forth in the respective grant agreements. The value of these grants will be recorded as future equity-related compensation expense. The performance-based restricted stock relates to 702,003 shares of Liquidity Services common stock. Liquidity Services expects the transaction to be dilutive to fiscal year 2018 GAAP earnings per share and will become accretive to GAAP earnings per share during fiscal year 2019.