As the Covid-19 crisis continues to evolve on a daily basis and impact both commerce and the economy, the needs of clients to convert assets to cash only expands. From those clients whose needs pre-date the pandemic, to those newly impacted by shut downs, CA Global remains committed to helping provide guidance and solutions in turning assets into cash.
 

The CA Global team is no stranger to navigating through times of crisis and extreme market challenges, most notably following 9/11 and the 2008 market crash. The current crisis however looms as potentially more impactful on global commerce in both the short and long term. As such, the following is intended to respond to the many questions being asked of us by Sellers and also to help anticipate the future as conditions and circumstances continue to change.

Q. Is it possible to run auction sales in the current environment?
 

A. The short answer is ‘yes’. How we can and will continue to do so will depend upon a number of factors:
 

Preparation – Where are the facilities located? On-site asset preparation will be impacted based on: a) whether the state has issued a lock down on non-essential business activity, b) whether or not the business entity is considered ‘essential’, c) our ability to get staff to the market in the event of travel restriction. If selling inventory or assets already adequately cataloged by the company, it may be possible to prepare for a sale without any physical on-site requirements.

 

Inspections – Over the last 10 years, the percentage of buyers that participate in commercial auctions without physical inspection has risen significantly; on average, we estimate that only 20-30% of buyers attend scheduled inspections. Items that can be presented well by photograph, and enhanced with specifications, condition and other descriptors may be sold effectively without holding an inspection. For more complex production lines and/or other technical assets, we can support buyers by fielding specific asset information requests and taking video of select items, machines in operation and/or overall facilities. Where determined that a physical inspection is necessary, if the industry is considered essential, we can schedule inspections to meet crowd size restrictions and social distancing guidelines. For assets of companies not considered essential, clients must evaluate the potential trade-off in recovery values against other costs and uncertainties of delaying a sale.

 

Auction Process – We use two primary auction methods, both of which occur entirely online. Our timed auctions use a set closing time for each item. The bidding automatically extends for each item until no bidding occurs within a set time frame (i.e. 4 minutes). Our proprietary hybrid auctions, meanwhile, occur  like live auctions, with an auctioneer moderating one item at a time, though doing so entirely online. The auctioneer’s presence on screen, control of the bidding pace, and ability to adjust increments add a personal touch to the auctions, as well as a strategic advantage. Either method can be effectuated in the current business environment.

Our Auction Network Operations Center (“ANOC”) is setup to allow single operator and remote operator auctions.

Checkout / Item Removal – Dependent upon the various factors stated above and type of asset being sold, checkout can be addressed in one of several ways: i) removal permitted by buyers on an appointment only basis to ensure appropriate distancing, ii) removal permitted by shipping/rigging companies only, as arranged by buyers, iii) product shipped to buyers based on established pricing models.

Q. Are you able to run liquidation / orderly sales of assets or wholesale inventories?

A. For orderly sales of wholesale inventories or raw materials serving a defined vertical market, liquidation sales can still occur, provided we have adequate access to key information regarding the assets to be sold. Detailed descriptions and photos, where necessary and available, are often sufficient to convey to a prospective buyer and obtain a purchase commitment. Any challenge to overcome will likely come down to our ability to fulfill the purchases. Provided the facility can be staffed by company personnel to pull orders, receive trucks and verify assets during load out, liquidation transactions can be completed.

Q. Will buyers participate in auctions and liquidations?

A. At this stage of the crisis, we are finding participation to remain relatively steady for most sales, with participation reductions offset by an increased willingness of many to participate in online commerce and, more so, to find good deals. That said, participation and results do not necessarily occur lockstep. In certain cases, increased participation will not result in higher pricing, where as a sale with fewer participants may still achieve full value if product demand persists (see recovery commentary below).

Orderly sales can occur in the current environment, with a remote direct selling effort.  The process is subject only to local regulations and public safety guidelines regarding asset removal.

Q. How can I expect recovery values to hold up through a sale?

A. More than ever, asset category, mix, quality, age and condition will drive recoveries. While the GDP is expected to shrink considerably over the coming months, businesses are still selling goods, some sectors much more so than others. This means demand exists for certain products, and associated manufacturing equipment and downstream assets. Further, certain industries may surge post-crisis, inspiring opportunistic buyers with cash to invest in such categories as technology assets, trucking and transportation fleets, food processing equipment and other thriving and/or quick to recover market segments.  

All this taken in consideration, history dictates that in all but high demand markets, pricing will become highly sensitive to such factors as age, quality and condition of the assets. The likelihood of an increased volume of excess product and surplus equipment means buyers will have options. This means end users will gravitate towards the better assets. And, with greater availability, resellers will more quickly exhaust space and cash reserves, thereby focusing their purchase interests and limiting their purchase power.
 

Unfortunately, these factors will not likely have short term implications. Holding on to goods hoping for a turn in the market may not be the best move. For certain industries, bounce back may not occur for some time. Meanwhile, additional assets or products will flood the market, further deteriorating values, as new replacement products enter the market.

Use an AssetTrax solution to help you identify and redeploy idle assets or plan for timely dispositions of excess equipment. 

Q. How else can CA Global support us now or as circumstances evolve?

A.  More than ever, prudent planning will be an essential component of business survival. While no one can predict what is to come next regarding Covid-19’s impact on commerce, we can all take time to forecast the potential economic impacts on our respective businesses. For asset intensive companies, this includes knowing what assets you have, the remaining useful life of those assets and their associated values. Through our AssetTrax product and appraisal services, CA Global Partners can deploy teams and provide systems to gather this intel, while providing both the visibility for planning purposes and the tools to more easily redeploy equipment to other parts of your enterprise and/or implement sales of excess inventories and idle assets quickly and efficiently.

Q. What makes your service uniquely qualified to best service our company’s needs?

A. CA Global Partners is comprised of seasoned professionals with decades of experience selling a broad range of assets under a vast array of circumstances. We are also tightly integrated with our partner companies including: GA Global’s access to industry leading appraisal services 

and knowledge, asset based capital and turnaround management services; AssetTrax equipment and fleet management systems (including mobile device data collection), and its ability to perform asset audits with boots on the ground in most markets throughout North America and Europe; Bidpath’s proprietary live webcast, timed auction and unique hybrid bidding platform, as well as associated development teams to adjust technology to quickly meet the challenges of the moment. We are ready, prepared and experienced to help find a solution that solves your challenges.

CA Global Partners is ready and able to engage in dialogue today, to help you plan and execute the solutions you need tomorrow. Contact one of our professionals by calling us at +1 818.340.3134.

We will put you in touch with one of our specialists for a confidential consultation.

CA Global provides technology, marketing and management solutions to those selling assets through the expedited process of auction or liquidation. We work direct with sellers around the globe, empower partner auction companies with the tools they require, and partner with both auction companies and dealers to deliver comprehensive solutions with exceptional results. CA Global is the exclusive servicer of Great American Group’s Wholesale and Industrial dispositions under the GA Global brand.

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