(This story was edited to clarify one of Saligram's titles while he was at InterContinental Hotels).
When Ravi Saligram was asked to join Ritchie Bros. Auctioneers (TSX,NYSE:RBA) as the new CEO in 2014, the company’s share value and market cap was half what it is today.
The company, which auctions heavy equipment and trucks for the construction, farming and resource industries, has profited some by the resurgence of resource sectors like mining and the general economic growth in North America.
But the company’s dramatic growth in profits and size can be largely credited to Saligram’s efforts to expand the company through acquisition and diversification. He has a track record in that regard.
Prior to joining Ritchie Bros., the 62-year-old businessman was responsible for raising OfficeMax’s market cap and revenue and then executing a merger with Office Depot Inc. (Nasdaq:ODP) in 2013.
When Office Depot made a play for OfficeMax, Saligram fought the move and set out to enlarge the company so that, instead, the two office supply companies could do “a merger of equals.”
“We had turned it around enough that our market cap had become equal to [Office] Depot,” Saligram said.
After the merger, in 2014, Saligram was approached by an executive headhunter to consider the CEO’s job at Ritchie Bros. after former chief executive Peter Blake announced he was leaving to become CEO of WesternOne Inc. (TSX:WEQ). Saligram, a U.S. citizen, was reticent about taking a job in Canada in an unfamiliar sector.
“I said, ‘I know nothing about heavy equipment. I’ve been in consumer packaged goods, hotels, food service.’”
But after meeting the board of directors, he said he saw huge growth potential. He also liked the prospect of moving from the office supply sector, which had low margins, to one with a higher profit ratio.
“What distinguishes our company is our high operating margins – unlike my retail business that I was in – and our cash flow,” Saligram said. “This is a very powerful cash generator. It’s a cash engine. That’s why we have the high market cap, because we’ve been relentless and very laser-focused on driving cash growth, because … what investors ultimately want is cash earnings.”
Since Saligram joined Ritchie Bros. in July 2014, the company’s share value has roughly doubled, from about $26.50 to $49.75 at the beginning of September, doubling its market cap to $5.4 billion. The company has also nearly doubled its free cash flow.
That growth was accomplished through acquisitions that have diversified the company’s channels and markets.
Last year, the company bought a U.S. online heavy equipment auction company called IronPlanet for $758 million. That added a new technology dimension to the company, which has traditionally specialized in live auctions. The company has also diversified into the financial services business, with Ritchie Bros. Financial Services providing financing for customers.
“We don’t use our balance sheet, but we act as a middleman between the banks and the customers,” Saligram said. “We’ve created technology connections and very rapid ways to get them loans and get them better, competitive loans. We’ve funded more than $1 billion in funded volume of loans. So that’s been a hot area of growth for us.”
One of the company’s smaller but more novel acquisitions happened in January, when it acquired Leake Auction Co., an Oklahoma company that specializes in classic car auctions.
That may seem like a bit of a departure for a company that has specialized in trucks and heavy equipment. But it certainly fits with Saligram’s own personality, since he has a taste for the finer things in life – antiques, Asian art, classical music, theatre, fine wines and coffee.
“I’m a coffee snob,” he said. “I go hunt for beans all over. And I love Vancouver because it’s a great coffee culture. I’m also a wine collector. I love classical music and we love the theatre. We go to New York all the time for theatre.”
The “we” he refers to includes his wife, Nalini Saligram, who has a PhD in biochemistry and runs a non-profit, Arogya World, that advocates for diabetes and heart disease prevention. She is, he said, “far smarter” than her husband.
The Saligrams have two grown daughters and a home in Chicago. Ravi Saligram spends some weekends in Chicago, but when he’s not travelling, he spends most of his time in Vancouver, where he has an apartment.
Born in Delhi, India, Saligram was raised in Bangalore. His father was a brigadier-general in the Indian army. He earned an engineering degree from Bangalore University and then moved to the U.S. to take an MBA at the University of Michigan. He stayed in the U.S. and became an American citizen.
Throughout his career, Saligram has worked in a variety of industries, including the hotel business. He worked for InterContinental Hotels Group, including a stint as president of North American Brands and Franchising. He also worked for S.C. Johnson & Son and as president, international, for food service, uniform and facilities provider Aramark.
Now celebrating its 60th anniversary, Ritchie Bros. was a private, family business until 1998, when it went public. It started listing on the Toronto Stock Exchange in 2004. The company has grown into the world’s largest heavy equipment auctioneer and has branch offices throughout the U.S., one in the Netherlands and 40 auction sites throughout North America, Europe, the Middle East, Australia and Asia.
The company employs 2,100 people, about 400 of whom are based in Burnaby at the company’s Canadian headquarters. For this year’s 60th anniversary, the company awarded all full-time employees 10 shares in the company (about $500 each).
“We wanted everyone to be a shareholder, everyone to be an owner of the company so they felt a real ownership for the company,” Saligram said. “This was a way for me to say, ‘We are all owners.’” •
Join us to celebrate this year’s honourees at the 2018 BC CEO Awards November 15, 2018, hosted at the Fairmont Waterfront Hotel. For tickets and event info, visit www.biv.com/ceo.
