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Liquidity Services buys National Electronic Service Association

Deal is one of the first to marry an e-commerce company and physical distribution provider.

Liquidity Services Inc., an online marketplace for surplus, returned, and end-of-life merchandise, has acquired Toronto-based National Electronic Service Association (NESA), which provides forward and reverse logistics services supporting the disposition of used electronic, telecommunications, and high-tech products. The deal is one of the first that allows an e-commerce company perform the actual physical distribution of goods bought and sold on its website.

Terms of the all-cash deal, which was made public on Nov. 2, were not disclosed.


Liquidity Services, based in Washington, D.C., said it facilitates $3 billion in transactions each year between 2.2 million users. The acquisition of NESA will establish Liquidity Services' first distribution center in Canada and allow the company to cross-sell its services to current and prospective clients in both countries, it said.

"With the proliferation of technology causing complexity and shorter life cycles across thousands of products, our comprehensive reverse logistics solution, encompassing returns management, refurbishment and multichannel disposition, and re-sale services, enables us to reduce costs and increase recovery value for retailers and OEMs (original equipment manufacturers)," said Bill Angrick, chairman and CEO of Liquidity Services, in a statement.

BG Strategic Advisors, a Palm Beach, Fla.-based supply chain mergers and acquisitions advisory firm, was NESA's financial adviser in the transaction. Ben Gordon, founder of the firm, said Tuesday at the joint annual conference of the National Industrial Transportation League and the Intermodal Association of North America in Anaheim, Calif., that it is one of the first, if not the first, deal to his knowledge that takes a pure e-commerce provider into the realm of physical distribution for products ordered on its site.

Gordon said more e-commerce providers may be interested in exploring this model as a way to become a fully integrated solution, keep control of the ordering and distribution process, and generate more revenue and profits. He cited Amazon.com's March 2012 acquisition of Kiva Systems Inc., a maker of robotic order-fulfillment technology, as an example of a pure player in e-commerce stepping into the physical realm to manage the fulfillment of merchandise orders transacted on its site.

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