Press Releases
Feb 18

Liquidity Services Announces Agreement to Divest its Jacobs Trading Business to Tanager Acquisitions, LLC for $17 Million

WASHINGTON–(BUSINESS WIRE)–Sep. 25, 2015–
Liquidity Services (NASDAQ: LQDT), a global solution provider in the
reverse supply chain with the world’s largest marketplace for business
surplus, today announced that it has entered into a definitive agreement
to sell its Jacobs Trading business to Tanager Acquisitions, LLC, a
Minnesota-based reseller of closeout merchandise, in an approximately
$17 million transaction. The companies expect to complete the
transaction by September 30th. Final timing will depend on satisfaction
of customary closing conditions.

The agreed upon consideration to Liquidity Services for the Jacobs
Trading business is approximately $13 million, subject to final closing
adjustments and payable in the form of a five-year note, plus the
opportunity to receive up to an additional $2 million in cash based on
achievement of earn-out targets in calendar year 2019, and up to an
additional $2 million in cash based on achievement of earn-out targets
in calendar year 2020.

Additionally, the sale of the Jacobs Trading business allows Liquidity
Services to utilize approximately $127 million in tax losses resulting
in an anticipated near term cash benefit of approximately $35 million
from tax refunds and a tax loss carry forward of approximately $31
million generating another approximately $13 million of tax benefit
against future earnings. The transaction is expected to result in an
approximately $29 million credit to income tax expense for fiscal year
2015. This divestment follows the termination of the legacy Jacobs
Trading Wal-Mart contract which materially reduced the scope of the
Jacobs Trading business.

“This transaction unlocks substantial near term growth capital that we
will reinvest in our core Retail Supply Chain Group business focused on
providing Fortune 1000 retailers and manufacturers with a complete
reverse logistics solution for managing customer returns, shelf pulls,
excess and overstock inventory,” said Jim Rallo, President of Liquidity
Services’ Retail Supply Chain Group.

Forward-Looking Statements

This document contains forward-looking statements made pursuant to the
Private Securities Litigation Reform Act of 1995. These statements are
only predictions. The outcome of the events described in these
forward-looking statements is subject to known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to differ materially
from any future results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements. These
statements include, but are not limited to, statements regarding the
Company’s business outlook, plans to increase investments in technology
infrastructure, our proprietary e-commerce marketplace platform, product
development and marketing initiatives, the LiquidityOne Transformation
program, the supply and mix of inventory under the DoD Surplus Contract,
expected future effective tax rates, and trends and assumptions about
future periods, including the fourth quarter FY15 and the full year
FY15. You can identify forward-looking statements by terminology such as
“may,” “will,” “should,” “could,” “would,” “expects,” “intends,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential,” “continues” or the negative of these terms or other
comparable terminology. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot
guarantee future results, levels of activity, performance or
achievements.

There are a number of risks and uncertainties that could cause our
actual results to differ materially from the forward-looking statements
contained in this document. Important factors that could cause our
actual results to differ materially from those expressed as
forward-looking statements are set forth in our filings with the SEC
from time to time, and include, among others, our dependence on our
contracts with the DoD for a significant portion of our revenue and
profitability; our ability to successfully expand the supply of
merchandise available for sale on our online marketplaces; our ability
to attract and retain active professional buyers to purchase this
merchandise; the timing and success of upgrades to our technology
infrastructure; our ability to successfully complete the integration of
any acquired companies into our existing operations and our ability to
realize any anticipated benefits of these or other acquisitions; the
success of our business realignment and LiquidityOne integration and
enhancement initiative. There may be other factors of which we are
currently unaware or deem immaterial that may cause our actual results
to differ materially from the forward-looking statements.

All forward-looking statements attributable to us or persons acting on
our behalf apply only as of the date of this document and are expressly
qualified in their entirety by the cautionary statements included in
this document. Except as may be required by law, we undertake no
obligation to publicly update or revise any forward-looking statement to
reflect events or circumstances occurring after the date of this
document or to reflect the occurrence of unanticipated events.

About Liquidity Services

Liquidity Services is a global solution provider in the reverse supply
chain with the world’s largest marketplace for business surplus. We
partner with global Fortune 1000 corporations, middle market companies,
and government agencies to intelligently transform surplus assets and
inventory from a burden into a liquid opportunity that fuels the
achievement of strategic goals. Our superior service, unmatched scale,
and ability to deliver results enable us to forge trusted, long-term
relationships with over 8,000 clients worldwide. With nearly $6 billion
in completed transactions, and approximately 3 million buyers in almost
200 countries and territories, we are the proven leader in delivering
smart surplus solutions. Let us build a better future for your surplus.
Visit us at LiquidityServices.com.

Source: Liquidity Services

Liquidity Services
Jeanette Hanfling
Director of Public
Relations
202-467-5723
[email protected]