4th Aug 2025 11:36
(Alliance News) - Auction Technology Group PLC shares plunged on Monday as it cut its margin guidance for the year and said it has bought vintage online marketplace Chairish LLC for USD85 million.
As a result of revenue mix, the London-based auction market operator and technology company is now guiding for its margin to be between 42% and 43% for the full year, before the impact of the acquisition.
The firm previously said it expects an adjusted earnings before interest, tax, depreciation and amortisation margin between 45% and 46%. The adjusted Ebitda margin for financial 2024 was 46%.
In response, shares in Auction Technology Group sank 21% to 378.72 pence in London on Monday morning.
Auction Technology said the Chairish deal strengthens its position in the Arts & Antiquities market, by expanding supply and increasing buyer reach into different consumer segments.
San Francisco, California-based Chairish is an online marketplace for vintage furniture, decor and art. In 2024, it generated USD51.2 million of revenue from commission, seller subscriptions, marketing fees and shipping revenue, weighted 80% to the US.
The acquisition will be funded from cash on the balance sheet and drawings under Auction Technology's existing revolving credit facility.
The company said it has agreed a USD75 million increase in incremental revolving credit facility borrowing capacity, which has increased its total facility to USD275 million from USD200 million.
The incremental facility is on the same terms as the existing facility.
Auction Technology said it sees "strong financial returns" from the deal as it will realise USD8 million of operational synergies.
The company said the transaction will add to adjusted earnings before interest, tax, depreciation and amortisation in the 2026 financial year and to be accretive to adjusted earnings per share in financial 2027.
Auction Technology said it also expects to generate a return on invested capital greater than weighted average cost of capital by financial 2027.
In the medium term, the company said it anticipates Chairish delivering double-digit revenue growth with adjusted Ebitda margins of around 30%.
Auction Technology said that revenue growth in the third quarter has "slightly improved" compared to the growth rate in the first half, due to strong growth in shipping revenue in Arts & Antiquities.
"Chairish is a highly strategic addition to our group as we continue to power the discovery of items worth finding again. Their strong brand, curated inventory, and loyal community enhance our position in the Arts & Antiques category and broaden our reach across high-intent buyers and quality sellers," said Chief Executive Officer John-Paul Savant.
"Together, we expand channel choice, increase marketplace liquidity, and unlock near-term commercial value - including meaningful cost synergies - while advancing our long-term vision to build a trusted, tech-enabled platform for the discovery and exchange of unique secondary items."
By Michael Hennessey, Alliance News reporter
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