Information on the Target

PS Intressenter AB, commonly known as PS Auction, is a prominent online auction platform in Sweden, founded in 1958. The company operates across Scandinavia, including Sweden, Finland, Denmark, and Estonia, and specializes in facilitating the sale of goods arising from bankruptcies, divestments, surpluses, and returns. Since MVI Fund II AB invested in PS Auction in September 2020, the company has executed an aggressive growth strategy that included the acquisition of Units/Slag1 in June 2021, which enhanced their sales force focused on the Divestment segment. This move also strengthened the management team and expanded logistics capabilities, setting a robust foundation for its rising Surplus & returns segment.

Industry Overview in Sweden

The online auction market in Sweden is part of a broader shift towards digital and circular economies, reflecting an increasing consumer demand for sustainable practices. Companies across various sectors have amplified their investments in sustainability efforts, recognizing that integrating circular business models is essential for long-term viability. The auction market, however, has been characterized by slower technological adoption and only recently began leveraging digital transformation effectively to meet this demand.

As traditional auction houses transition to online platforms, the competitive landscape has intensified, with larger players recognizing the need for scalability and technological integration to capitalize on market growth. The entry of major players like TBAuctions signifies a robust consolidation trend within the auction industry, aiming to create more efficient and attractive marketplaces for both buyers and sellers.

In this evolving landscape, the Nordic auction market stands out with rising digitalization, presenting significant opportunities to enhance operational efficiencies and customer experiences. Through strategic consolidations, such as that between PS Auction and TBAuctions, the industry can better position itself to leverage technology for improved scalability and user engagement.

The Rationale Behind the Deal

MVI Fund II AB's decision to divest PS Auction arose from a series of M&A discussions in the Nordics, leading to a strategic partnership with TBAuctions to consolidate the auction market within the region. This move is anticipated to enhance PS Auction's competitiveness in an increasingly digitalized environment, where the need for size and technological capability is paramount.

The acquisition also allows PS Auction to benefit from TBA's advanced auction technology platform, ATLAS. This integration will enable PS Auction and its Norwegian counterpart, Auksjonen, to maintain their brand identities while sharing insights and collaboration across logistics and auction services.

Information About the Investor

TBAuctions operates as one of Europe’s largest online auctioneers, boasting a robust portfolio that includes the brands Troostwijk Auctions, BVA Auctions, and several others. Majority ownership is held by Castik Capital, a Munich-based private equity firm known for investing in technology-driven companies across various sectors. In conjunction with this acquisition, Summa Equity, Europe's largest impact fund, joins TBAuctions as a minority stakeholder, indicating a strong alignment with socially responsible investment practices.

The backing from reputable investors like Castik Capital and Summa Equity positions TBAuctions for continued investment and growth within the auction sector, enabling further consolidation efforts and technological advancements that are critical for future success.

View of Dealert

From an investment perspective, the acquisition of PS Auction by TBAuctions presents a potentially sound opportunity for various reasons. Firstly, the ongoing shift towards digitalization and circular economic models indicates strong demand for efficient auction services, which PS Auction is well-positioned to dominate in collaboration with TBAuctions. Their combined expertise and brand recognition in Scandinavia will likely strengthen market share.

Moreover, the strategic integration of technology through the ATLAS platform provides a crucial advantage in scalability and operational efficiency. By utilizing this state-of-the-art technology, both companies can enhance their auction processes and customer experiences, setting them apart from competitors still reliant on traditional methods.

However, the long-term success of this partnership will rely on effective execution of their integration strategy and their ability to adapt to ongoing market changes. The emphasis on sustainability and efficiency aligns well with current consumer trends, potentially boosting PS Auction's appeal to environmentally-conscious buyers.

In summary, while there are inherent risks in any acquisition, the foundational strengths and market context suggest that this deal could yield favorable returns for TBAuctions, facilitating its growth ambitions in the competitive online auction sector in Europe.

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