FreeMarkets targets surplus market with buys
The online auctioneer says it will acquire privately held surplus product distributors Surplus Record and SR Auction for $18 million in cash.
The acquisition boosts FreeMarkets' customer base at a time when large industrial companies are increasingly turning to the Internet to sell their surplus equipment and inventory, the company said. FreeMarkets builds marketplaces and online auctions of industrial parts, raw materials and commodities.
Surplus Record manages an independent monthly directory of used and surplus machinery and equipment. It also operates an online used machinery and equipment auction Web site, SR Auction.
The online surplus industry is heating up as investors eye opportunities available in the estimated $300 billion to $350 billion global market for surplus equipment and inventory.
Under the terms of the agreement, FreeMarkets will acquire Surplus Record and SR Auction for $18 million in cash. At the deal's close, expected to occur in the second quarter of 2000, the assets and employees of Surplus Record and SR Auction will be incorporated into FreeMarkets' Surplus Asset eMarketplace group.
FreeMarkets earlier this month bought iMark.com, which operates an online marketplace, in a stock deal valued at $325.1 million. FreeMarkets competes against online auctioneer FairMarket.