Asset auctions sell company-owned assets, often as part of a liquidation or to remove excess inventory. They can also be used to sell assets no longer needed, or by corporate raiders to dismantle a business. Auctions can yield higher returns and attract interested buyers.
Asset auctions are auctions that deal specifically with the sale of assets owned by companies. In some cases, the auction is held to dispose of company assets as part of a business liquidation. At other times, the auction is held as a means to sell assets that are no longer important to the core business operation, allowing the company involved to remove excess inventory from it. In any situation, the goal is to get the best possible price for each asset that is placed on the auction block.
One of the most common applications of asset auctions is the sale of assets that were once useful to a company, but are no longer needed for some reason. For example, a company that has decided to combine manufacturing functions that were once managed at two separate facilities at a single location will generally want to dispose of at least some real estate and equipment as a result of the merger. In this scenario, holding an asset liquidation auction allows you to quickly and easily get rid of facilities and equipment that are no longer needed by the company. By doing so, the company can reduce its tax burden, decrease its equipment inventory, and divert auction proceeds to another area of business operation.
It is not uncommon for asset auctions to be used when business owners choose to close a business transaction or are forced to do so as part of a bankruptcy action. In this scenario, the goal is to sell the business assets to the highest bidder. Depending on the nature of the assets, the auction may involve selling everything as a bundled deal or offering the various assets for sale individually.
Corporate raiders often make use of asset auctions after securing a controlling interest in their target companies. This is particularly true when the goal is to dismantle the business and earn a profit from the acquisition by selling off the company’s assets. Here, the strategy makes it possible to quickly arrange the sale of individual assets, and possibly even sell the shell of the company once all or most of its assets have been divested.
Using asset auctions to manage the quick and orderly disposition of assets has several advantages. Auctioneers can often help advertise the auction and qualified buyers in advance. This means that the auction participants are very likely to be interested and the bidding will be vigorous. While the auctioneer will receive a percentage of the sale in exchange for their efforts, many businesses find that using an asset auction approach yields higher returns that easily offset the auctioneer’s fees while still allowing the business to receive a fair amount. fair sale.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
