A-Mark Expands Product Portfolio into Collectibles by Acquiring the Parent of Stack's Bowers Galleries, A Leading Global Rare Coin Auction House and Dealer
EL SEGUNDO, Calif., Feb. 03, 2025 (GLOBE NEWSWIRE) -- A-Mark Precious Metals, Inc. (NASDAQ:AMRK) (A-Mark or the Company), a leading fully integrated precious metals platform, has entered into a definitive agreement to acquire 100% of the stock of Spectrum Group International, Inc. (SGI), the parent of Stack's Bowers Galleries (SBG), one of the world's largest rare coin and currency auction houses and a leading wholesale and retail dealer specializing in numismatic and bullion products, and the majority owner of Spectrum Wine (SW), a global auctioneer, retailer and storage provider of fine and rare wine.
The transaction is intended to complement A-Mark's core bullion business by, among other benefits, increasing its reach into strategically adjacent luxury markets that are expected to offer higher margins and expanded customer bases.
A-Mark will pay $92 million to acquire 100% of SGI's outstanding stock. The consideration will be comprised of 50% cash and 50% A-Mark common stock, with the stock portion valued as of the signing of the definitive agreement. The acquisition is expected to close within 30 days, subject to certain closing conditions, including the approval of SGI's shareholders, the execution of financing arrangements and the consent of A-Mark's lenders.
Spectrum Group International Overview
A-Mark has a long-standing relationship with SGI. A predecessor entity of SGI acquired 80% of A-Mark in 2005 and the balance of the Company in 2011. A-Mark was then spun-off into a separate publicly traded company in 2014. Greg Roberts is the Chief Executive Officer of both A-Mark and SGI, Mr. Roberts and another A-Mark executive comprise a majority of the board of SGI, and several A-Mark board members are shareholders of SGI. A-Mark established a special committee of independent members of its board to negotiate the acquisition on the Company's behalf and to recommend approval of the acquisition.
A. Stack's Bowers Galleries
SBG was founded in 1933 in New York and has grown to become a global leader in numismatics and bullion operating in two complementary units. The Auction Services unit conducts in-person, internet and specialized auctions of consigned and owned items and has sold a wide range of the most important rarities and numismatic collections over its distinguished history. SBG's Dealership unit maintains a sizeable inventory of rare coins and paper money that it sells as both a wholesaler to other retailers and a Direct-to-Consumer dealer. It also maintains a meaningful bullion inventory and is an important A-Mark trading partner. In addition, SBG complements A-Mark's distribution network in that it works with smaller institutional as well as retail customers. SBG is headquartered in Costa Mesa, California and operates additional offices in the United States, Europe and Asia.
SBG's financial highlights for the fiscal year ended June 30, 2024, include the following:
- Total Revenue of $536.4 million consisting of $24.0 million from the Auction Service unit and $512.4 million from the Dealership unit
- Gross Profit of $46.1 million
- EBITDA of $10.9 million
SBG's unaudited financial highlights for the six months ended December 31, 2024, include the following:
- Total Revenue of $311.2 million consisting of $19.5 million from the Auction Service unit and $291.7 million from the Dealership unit
- Gross Profit of $30.0 million
- EBITDA of $10.3 million
B. Spectrum Wine
Spectrum Wine was founded in 2009 and has sold over $180 million of wine to date. SW conducts weekly on-line auctions that feature wines ranging from modestly priced collectible vintages to highly sought after rarities. Storage is offered at two refrigerated California facilities where more than 600,000 bottles are believed to be in lockers managed by individual collectors. SW is based in Santa Ana, California, where it also operates a retail store. Although not a meaningful contributor to SGI's historical financial results, SW's leading position in the wine market is expected to support A-Mark's expanded focus on collectibles.
Management Commentary
"Acquiring SGI is a strategic step that significantly enhances A-Mark's position in high-value collectibles," said A-Mark CEO Greg Roberts. "By integrating Stack's Bowers Galleries' expertise in rare coins and paper currency, we are expanding into a bullion-adjacent category that commands higher premiums and stronger margins while also broadening our customer base. Spectrum Wine's focus on premium wines introduces a new revenue stream that complements our business model including Direct-to-Consumer expertise.
"This transaction also creates meaningful cross-selling opportunities as significant synergies exist between A-Mark's Direct-to-Consumer and wholesale customers and SGI's collectors, investors, and dealers. Having led SGI for many years, I am optimistic this acquisition will be financially and strategically accretive to A-Mark."
Brian Kendrella, President of SBG, added: "Joining forces with A-Mark allows us to leverage its financial strength and operational scale to accelerate growth in our auction, wholesale and retail businesses. Access to A-Mark's lending solutions offered by its Collateral Finance Corporation secured lending subsidiary will provide enhanced financing options for consignors and bidders, and cross promotion of our auction and retail listings to A-Mark's Direct-to-Consumer customers is expected to provide a significant opportunity for growth and added value to our auction consignors."
A-Mark management will discuss the transaction on its fiscal second-quarter earnings call scheduled for Thursday, February 6, 2025, at 4:30 p.m. Eastern Time. Conference call and webcast details can be found here.
Transaction Advisors
Roth Capital Partners is acting as financial advisor and Kramer Levin Naftalis & Frankel LLP is acting as legal counsel to the Special Committee of the A-Mark Board of Directors.
D.A. Davidson & Co. is acting as financial advisor and Olshan Frome Wolosky LLP is acting as legal counsel to SGI.
About A-Mark Precious Metals
Founded in 1965, A-Mark Precious Metals, Inc. is a leading fully integrated precious metals platform that offers an array of gold, silver, platinum, palladium, and copper bullion, numismatic coins, and related products to wholesale and retail customers via a portfolio of channels. The company conducts its operations through three complementary segments: Wholesale Sales & Ancillary Services, Direct-to-Consumer, and Secured Lending. The company's global customer base spans sovereign and private mints, manufacturers and fabricators, refiners, dealers, financial institutions, industrial users, investors, collectors, e-commerce customers, and other retail customers.
A-Mark's Wholesale Sales & Ancillary Services segment distributes and purchases precious metal products from sovereign and private mints. As a U.S. Mint-authorized purchaser of gold, silver, and platinum coins since 1986, A-Mark purchases bullion products directly from the U.S. Mint for sale to customers. A-Mark also has longstanding distributorships with other sovereign mints, including Australia, Austria, Canada, China, Mexico, South Africa, and the United Kingdom. The company sells more than 200 different products to e-commerce retailers, coin and bullion dealers, financial institutions, brokerages, and collectors. In addition, A-Mark sells precious metal products to industrial users, including metal refiners, manufacturers, and electronic fabricators.
A-Mark's consolidated subsidiary, LPM Group Limited (LPM), is one of Asia's largest precious metals dealers. LPM operates a consumer-facing showroom in Hong Kong's Central Financial District, and offers a wide selection of products to its wholesale customers through its 24/7 online trading platform, including recently released silver coins, gold bullion, certified coins, and the latest collectible numismatic issues.
Through its A-M Global Logistics subsidiary, A-Mark provides its customers with a range of complementary services, including managed storage options for precious metals as well as receiving, handling, inventorying, processing, packaging, and shipping of precious metals and coins on a secure basis. A-Mark's mint operations, which are conducted through its wholly owned subsidiary Silver Towne Mint, enable the company to offer customers a wide range of proprietary coin and bar offerings and, during periods of market volatility when the availability of silver bullion from sovereign mints is often product constrained, preferred product access.
A-Mark's Direct-to-Consumer segment operates as an omni-channel retailer of precious metals, providing access to a multitude of products through its wholly owned subsidiaries, JM Bullion and Goldline. JMB owns and operates numerous websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, CyberMetals.com, GoldPrice.org, SilverPrice.org, BGASC.com, BullionMax.com, and Gold.com. Goldline markets precious metals directly to the investor community through various channels, including television, radio, and telephonic sales efforts. A-Mark is the majority owner of Silver Gold Bull, a leading online precious metals retailer in Canada, and also holds minority ownership interests in three additional direct-to-consumer brands.
The company operates its Secured Lending segment through its wholly owned subsidiary, Collateral Finance Corporation (CFC). Founded in 2005, CFC is a California licensed finance lender that originates and acquires loans secured by bullion and numismatic coins. Its customers include coin and precious metal dealers, investors, and collectors.
A-Mark is headquartered in El Segundo, CA and has additional offices and facilities in the neighboring Los Angeles area as well as in Dallas, TX, Las Vegas, NV, Winchester, IN, Vienna, Austria, and Hong Kong. For more information, visit www.amark.com.
A-Mark periodically provides information for investors on its corporate website, www.amark.com, and its investor relations website, ir.amark.com. This includes press releases and other information about financial performance, reports filed or furnished with the SEC, information on corporate governance, and investor presentations.
Important Cautions Regarding Forward-Looking Statements
Statements in this press release that relate to future plans, objectives, expectations, performance, events and the like are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These include statements regarding the occurrence and the timing of the closing of the transaction described in this release, and the anticipated benefits to A-Mark and its affiliates of the transactions. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results or circumstances to differ materially from those expressed or implied in these statements. Factors that could cause actual results or circumstances to differ include the following: Delays in consummating the transaction, or the inability to consummate the transaction because certain conditions to closing are not satisfied, including the failure to obtain necessary third-party consents or approvals, timely or not at all; greater than anticipated costs incurred to consummate the transaction and to integrate the businesses of SGI within A-Mark; the future performance of the businesses of SGI being weaker than what is forecasted; the inability to grow the businesses of SGI as anticipated; the failure to realize cross-selling opportunities and synergies; and the strategic, business, economic, financial, political and governmental risks and other Risk Factors affecting the businesses of the company and the industries in which it operates, as described in in the company's public filings with the Securities and Exchange Commission.
Company Contact:
Steve Reiner, Executive Vice President, Capital Markets & Investor Relations
A-Mark Precious Metals, Inc.
1-310-587-1410
[email protected]
Investor Relations Contacts:
Matt Glover and Greg Bradbury
Gateway Group, Inc.
1-949-574-3860
[email protected]
