washingtonpost.com > Business > Local Business

Online Auctioneer Files For $86.3 Million IPO

By Ellen McCarthy
Washington Post Staff Writer
Monday, November 21, 2005

Liquidity Services Inc., a District company that runs online auction sites for surplus goods from women's shoes to military planes, filed Friday to raise $86.3 million in an initial public offering.

The six-year-old company carved a niche in the growing Internet auction market by winning a contract that gives it exclusive rights to the Defense Defense's surplus property. Among the items available for bidding yesterday at http://www.govliquidation.com , the company's military auction site, were a 120-foot work barge, 55 steel-pot troop helmets and a set of six handheld radios.

Online auction sales in the United States are expected to rise to $65 billion in 2010 from $28 billion this year. Apparel, books and beauty products make up much of that market, and sites that cater to consumers, such as eBay and Overstock.com, have become household names.

Although they are not as well-known, companies such as Liquidity and Silver Spring-based Bid4Assets Inc. generate revenue by selling big-ticket items and bulk orders through their sites. The buyers are corporations that put the goods to immediate use, as well as small retailers that resell the products to their own customers.

"There have always been guys who took excess equipment and tried to sell it off," said Bob Parker, vice president of research at IDC, a market research firm. "When they go to an automated format . . . they're more apt to find qualified buyers who are willing to bid."

Liquidity was founded by William P. Angrick III, Jaime Mateus-Tique and Benjamin R. Brown during the height of the Internet frenzy in 1999. The three, all in their thirties, still run the 286-person company.

Liquidity's business took off in 2001 when the Pentagon's Defense Reutilization and Marketing Service awarded it the contract to handle the resale of all its surplus goods, which had been sold at traditional auctions. It was later awarded a similar contract by Britain's Defense Ministry.

Today, sales of military supplies and equipment account for 88 percent of the company's revenue. Liquidity's other three sites, Liquidation.com, GoWholesale and Wholesale411, sell excess business goods such as laptops and printers, as well as bulk quantities of name-brand T-shirts and pet supplies.

Liquidity earned $4.1 million (18 cents a share) in the year ended Sept. 30, down from $5.3 million (30 cents) in the comparable period the previous year, according to its filing with the Securities and Exchange Commission. Revenue rose to $89.4 million from $75.9 million. Liquidity said the number of buyers registered with its sites grew to 386,000 from 264,000.

© 2005 The Washington Post Company