Stack's being acquired by A-Mark

TwoKopeiki

Some news to start the week:

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

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.

worldcoinguy

Sounds like they are shoring up to offer more competition to Heritage. Might be great answer for both companies but the history and heritage of Stacks being purchased up by a bullion company feels a bit like Cartier brand being gobbled up by a mall jeweler.

Abuelo

It feels as if a collector's company is bought by a money making enterprise. I hope I'm mistaken.

7Jaguars

Agreed. Not much we can do about it & don't come away with a good feeling about it. Those SB bullion sales/auctions will likely increase I would guess but who knows where it will go.

SimonW

Stacks may be on the way down. Maybe not.

Could create a vacuum for other smaller auction houses to prove their meddle.

TheGoonies1985

@SimonW said:
Stacks may be on the way down. Maybe not.

Could create a vacuum for other smaller auction houses to prove their meddle.

Hopefully not they have many Latin American coins for sale every year. Since I have been looking at their auctions (2-3 years) they have an auction every month or so and that keeps things fun for us collectors. Were as Heritage has 2-3 major Latin American coins auctions per year. I really enjoy seen what Stacks has each month for sale.

krueger

SBG has helped me nicely over the last ten years. But lately I have gravitated to sell alot thru great collections.
I hope my relations with SBG will not change or go away though.
The numismatic world us changing:
PCGS is shutting down 60 year old California coin shows.
NGC no longer comes to the west coast.
Who knows how SBG will function after the buyout.
Is the Numismatic community slowly dying as it ages ? Much like the stamp community.
Just wondering.

TheGoonies1985

@krueger said:
SBG has helped me nicely over the last ten years. But lately I have gravitated to sell alot thru great collections.
I hope my relations with SBG will not change or go away though.
The numismatic world us changing:
PCGS is shutting down 60 year old California coin shows.
NGC no longer comes to the west coast.
Who knows how SBG will function after the buyout.
Is the Numismatic community slowly dying as it ages ? Much like the stamp community.
Just wondering.

If it is ''dying'' then I will buy even more coins if they become cheaper. I doubt it is but if ever it was that is my plan.

MrEureka

S-B and A-Mark have been closely related for many years, with Greg Roberts acting as CEO of both firms. I don’t see any reason to expect this merger to change much at all about how either company operates, or about who runs anything.

7Jaguars

Could be wrong, and not a simple "litmus test" but they certainly have turned in the direction of regular bullion sales. Could be seen as natural, but definitely a vector change.

angelo43

I'm not a world traveller but I was in Italy last year and the market for coins was strong. Prices were high and at the international show in January there were many coins at higher prices. Also, I know stamps are dead but in Italy they are thriving, from what I saw. Anyone go to Berlin and can give us a report?

TwoKopeiki

@MrEureka said:
S-B and A-Mark have been closely related for many years, with Greg Roberts acting as CEO of both firms. I don’t see any reason to expect this merger to change much at all about how either company operates, or about who runs anything.

Sounds more like some asset realignment by the parent companies.

Bailathacl

Cross-marketing opportunities I suspect.