Auctioneer sees silver lining in dropping oil prices
IronPlanet, a major heavy equipment auctioneer, expects an up-tick in its energy unit this year and next due to a downturn in the oil patch, says the company's CEO Greg Owens.
While some oil and gas operators are well financed and can hang onto their equipment, others need to find funds after oil prices slipped.
"There are some companies in a very strong financial position that will just hold onto their equipment and wait for the rebound," says Owens who talked to MINING.com in April.
"There are other companies that are probably more highly leveraged that will end up getting some liquidity out of this equipment."
IronPlanet—which runs auction services in mining, construction and oil and gas—experienced the same up-tick in construction sales after the 2008 recession. Customers sought out IronPlanet's allEquip auction site to get rid of unneeded equipment.
IronPlanet, which started 15 years ago, is backed by Accel Partners, Kleiner Perkins Caufield and Byers, Caterpillar, Komatsu and Volvo.
IronPlanet is the second largest auction company in the world and the largest online auction company. It's family of sites include CAT Auction Services, allEquip, GovPlanet, TrackPlanet and Kruse Energy. Collectively IronPlanet will do $1 billion in gross merchandise sales this year, which Owens estimates as being 10% of the entire size of the heavy equipment auction industry.
IronPlanet's Matthew Bousky, Vice President of New Business Development says the mining sector is bleak.
"The mining industry has been really struggling. There is a lot of excess capacity, lots of machines parked," says Bousky.
He singled out the development space in Australia as being particularly hard hit.