A-Mark Precious Metals Direct-to-Consumer Subsidiary JM Bullion to Acquire Assets of BGASC

Rhea-AI Summary

A-Mark Precious Metals (NASDAQ: AMRK) announced the acquisition of BGASC, LLC for $4.5 million in cash. BGASC, a significant player in the U.S. bullion market with over 70,000 customers and revenues exceeding $200 million in 2021, will operate as a standalone brand under A-Mark's subsidiary, JM Bullion. This acquisition aims to enhance A-Mark's direct-to-consumer portfolio and leverage BGASC's established online presence. The deal is expected to close in Q4 2022, pending customary closing conditions.

Positive

• Acquisition of BGASC enhances A-Mark's direct-to-consumer portfolio and market presence.
• BGASC's established customer base provides immediate access to over 70,000 customers.
• Transaction value of $4.5 million represents a strategic investment in a recognized e-commerce brand.

Negative

• Integration challenges may arise while merging BGASC's operations with JM Bullion.
• The acquisition could strain finances if anticipated revenues and benefits are not realized.

Established Online Precious Metals Dealer

EL SEGUNDO, Calif., Aug. 30, 2022 (GLOBE NEWSWIRE) -- A-Mark Precious Metals, Inc. (NASDAQ: AMRK) (A-Mark), a leading fully integrated precious metals platform, today announced that its wholly-owned subsidiary, JM Bullion, Inc. (“JMB”), has entered into a definitive agreement to acquire certain assets of BGASC, LLC (“BGASC”), one of the largest coin and bullion e-commerce dealers in the United States, for $4.5 million in cash.

BGASC was founded in 2012 and has more than 70,000 customers, with reported revenues for calendar year 2021 in excess of $200 million. Based in California, BGASC delivers gold and silver coins and bullion directly to consumers through its online platform. The assets to be acquired include BGASC’s website, domain name, trademarks, logos, customer list, and all intellectual property. Following the closing, JMB expects that BGASC will continue to operate as a standalone brand.

“This transaction reflects our ongoing efforts to expand our direct-to-consumer portfolio through strategic acquisitions and investments,” said JMB CEO Michael Wittmeyer. “BGASC is a well-respected e-commerce brand in the DTC segment of the precious metals industry, with a loyal and growing customer base. JMB and A-Mark have a track record of successfully integrating newly acquired brands into our DTC portfolio, and we look forward to improving the BGASC customer experience by leveraging our resources and expertise to offer new products, other value-added services and flexible payment methods, as well as to seek to expand BGASC’s market presence.”

The acquisition is expected to close in the fourth quarter of calendar 2022, subject to the satisfaction of customary closing conditions.

Transaction Advisors
Dan Shea, Managing Director with Objective Capital Partners, is acting as financial advisor to BGASC, and Duane Morris LLC is acting as legal counsel to JM Bullion.

About A-Mark Precious Metals
Founded in 1965, A-Mark Precious Metals, Inc. (NASDAQ: AMRK) 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, and e-commerce 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.

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. JM Bullion is a leading e-commerce retailer of precious metals and operates five separately branded, company-owned websites targeting specific niches within the precious metals market: JMBullion.com, ProvidentMetals.com, Silver.com, GoldPrice.org, SilverPrice.org. JMB also owns CyberMetals, an online platform where customers can purchase and sell fractional shares of digital gold, silver, platinum and palladium bars in a range of denominations. Goldline markets precious metals directly to the investor community through various channels, including television, radio and telephonic sales efforts. A-Mark also holds minority ownership interests in two additional direct-to-consumer brands.

The company operates its Secured Lending segment through its wholly owned subsidiaries, Collateral Finance Corporation (CFC) and AM Capital Funding. 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. AM Capital Funding was formed in 2018 for the purpose of securitizing eligible secured loans of CFC.

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, and Vienna, Austria. For more information, visit www.amark.com.

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 future macroeconomic conditions and demand for precious metal products, and the Company’s ability to effectively respond to changing economic conditions. 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 to differ include the following: the failure to execute the Company’s growth strategy as planned; greater than anticipated costs incurred to execute this strategy; changes in the current international political climate which has favorably contributed to demand and volatility in the precious metals markets; increased competition for the Company’s higher margin services, which could depress pricing; the failure of the Company’s business model to respond to changes in the market environment as anticipated; changes in consumer demand and preferences for precious metal products generally; the inability to satisfy the conditions to the closing of the BGASC acquisition, the failure of BGASC to maintain its unique customer base or changes in the buying preferences of this customer base; the failure otherwise to achieve anticipated benefits of the acquisition; general risks of doing business in the commodity markets; the effects of the COVID-19 pandemic and the eventual return to normalized business and economic conditions; and the strategic, business, economic, financial, political and governmental risks described in in the Company’s public filings with the Securities and Exchange Commission. The words "should," "believe," "estimate," "expect," "intend," "anticipate," "foresee," "plan" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

Company Contact:
Steve Reiner, Executive Vice President, Capital Markets & Investor Relations
A-Mark Precious Metals, Inc.
1-310-587-1410
sreiner@amark.com

Investor Relations Contacts:
Matt Glover or Jeff Grampp, CFA
Gateway Investor Relations
1-949-574-3860
AMRK@gatewayir.com

FAQ

What is the value of A-Mark's acquisition of BGASC?

A-Mark's acquisition of BGASC is valued at $4.5 million.

How will the BGASC acquisition impact AMRK's market position?

The acquisition is expected to enhance AMRK's direct-to-consumer offerings and expand its market presence.

When is the BGASC acquisition expected to close?

The acquisition is expected to close in the fourth quarter of 2022, pending customary closing conditions.

What are the potential risks of the BGASC acquisition for AMRK?

Risks include integration challenges and the potential for financial strain if anticipated benefits are not achieved.