Written by Marcia Doyle and published by Equipment World, October, 26, 2021.
When Ritchie Bros. Auctioneers acquired SmartEquip for $175 million in September, Ritchie CEO Ann Fandozzi said it would give Ritchie “asset-specific full-lifecycle parts and service support” to dealers, OEM partners and equipment buyers.
Of equal importance as SmartEquip considered suitors was continuating its multi-brand approach in the construction industry, says Alex Schuessler, SmartEquip founder and president, international group, talking with Equipment World.
“There was a lot of interest from other industries and private equity firms, but what really drew us to this partnership with Ritchie was a continued commitment to our existing customer base,” Schuessler says. “It was important for us to preserve industry neutrality. It took us a long time for our customers to feel comfortable that we were truly neutral, so that was absolutely critical going forward.”
In turn, SmartEquip, which provides software to support equipment lifecycle management, gives Ritchie a play on the parts, service and maintenance side of things, says Jim Kessler, president and COO, Ritchie.
“We knew how long it would take us to do this on our own and replicate what SmartEquip has already built,” Kessler says. “So for us it was the perfect match. We had customers who need this service and we weren’t able to provide it; it was an open hole for us. We know what the equipment is. We know where it is in the life cycle, how many hours on it, but we weren’t helping in that part of the value chain.”
But Kessler also emphasizes that the SmartEquip deal doesn’t mean it is in the parts stocking business. Rather, Ritchie is looking to add customer ease and value, he says.
“The magic in all of this is the equipment life cycle, and Ritchie has done phenomenal work in focusing not just on the moments that equipment changes ownership, but also what you do to support the equipment owners, dealers and manufacturers,” Schuessler says.
This especially comes into play with second and third owners of a machine where perhaps dealers and OEMs lose track of them. “We were looking at ways of ensuring that they have a longer view across the equipment life cycle and across the number of owners,” Schuessler says.
“We’ve long been aware that there are tremendous opportunities there with that second, third or fourth owner,” Schuessler says, “and it’s been frustrating because we’ve had no systematic way of supporting them. I think we’ll be able to help both equipment owners and dealers right off the bat.”
