Fast-Growing Liquidity Services, Inc. Attracts $20 Million Investment From ABS Capital Partners

Liquidity Services, Inc., which provides comprehensive asset recovery services for businesses and the public sector, today announced that it secured $20 million in an institutional round of financing. ABS Capital Partners, a leading private equity firm focused on investing in established and profitable growth companies, was the sole investor. As a result of the financing, Phil Clough, a general partner at ABS Capital, will join Liquidity Service's board of directors.

"We have grown our revenues at a compound annual growth rate of 118% over the last 3 years and are profitable. We have built the leading online asset recovery solution for our premier customers," said Bill Angrick, CEO of Liquidity Services, Inc. "Partnering with ABS Capital validates our success and demonstrates confidence in our future growth potential as a market leader with a unique business model that significantly improves the process by which businesses and public sector organizations dispose of surplus assets. We look forward to having Phil Clough join our board and utilizing his experience both as an investor and operating executive with rapidly growing public and private companies in the business services sector."

LSI has developed a strong value proposition related to surplus asset disposal through the use of online marketplaces, web based reporting tools and value added services that enable large organizations, such as financial institutions and government agencies, to sell significant volumes of surplus goods faster, with higher net recovery rates and with much stronger operating controls and visibility. To date, the disposal and sale of surplus goods has been highly inefficient and yet sales volumes in the U.S. and Europe are still in the tens of billions of dollars. Corporations and government agencies typically dispose of surplus assets, such as excess inventory, returned goods and end-of-life capital equipment, by selling items manually in bulk directly to liquidators or through traditional physical auction events. Compared to LSI's innovative approach, these traditional processes suffer from longer sales cycles, lower recovery rates because they do not access a large universe of buyers and poor information transparency and internal controls regarding the surplus assets being sold. Online auction sites, such as eBay, that offer a seller self-service model, do not provide any marketing assistance nor attempt to regulate the timing of auctions to create scarcity value and therefore are not suited to large volume business to business transactions. Traditional auctioneers have a typical reach of less than 250 miles from the auction site, which greatly reduces the number of available buyers. Liquidity Services develops and operates custom online business-to-business-auction marketplaces (currently under the brands Liquidation.com, Govliquidation.com and UKsurplus.com) and a search portal (under the brand goWholesale.com) that facilitate the marketing and sale of surplus assets for government and corporate sellers on a completely outsourced basis. Unlike auction sites such as eBay, which merely provide an online environment for the conduct of an auction, Liquidity Services manages the entire pre- and post-sale process, including receiving, storing, sorting and aggregating merchandise by type, location or condition, capturing digital information and images of the product, writing product descriptions enhanced with data from third party sources, determining the timing and type of sales methods (to prevent over-supply of a particular product type), pro-actively notifying potential buyers of products which may be of interest to them through email alerts and handling the logistics and administrative functions such as payment, enforcement of sales restrictions and buyer qualification. Liquidity Services makes it easy for large organizations to centrally track and manage all information related to the asset sale process through its secure, online administrative platform that greatly enhances client operating controls and oversight.

"We have come to know Liquidity Services over the past two years and have been continually impressed with the quality of the team, the significance of the opportunity and their execution," said Phil Clough, general partner at ABS Capital. He added, "We found Liquidity Services to have the best offering in the space, which was validated by the feedback we received from customers throughout our investment process."

The Company currently receives 630,000 unique visitors per month to its websites that conduct more than one million monthly product searches which help generate 90,000 unique bids per month and 170,000 lots sold per year and over $100 million annually in gross proceeds across more than 600 different product categories. The Company's professional buyer base boasts more than $2 billion in purchasing power enabling it to serve the needs of the largest corporations and government agencies in the world.

About Liquidity Services, Inc.