Auctioneer sees sell-offs of company assets as a chance for 'rebirth.'
A Stanley Bostitch heavy-duty stapler sold for $10. A reception office couch and chairs went for $205. One lucky bidder fetched an 866-MHz Dell PC for $300. It wasn’t supposed to end this way for Appian Communications.
A Stanley Bostitch heavy-duty stapler sold for $10. A reception office couch and chairs went for $205. One lucky bidder fetched an 866-MHz Dell PC for $300.
It wasn’t supposed to end this way for Appian Communications.
But don’t look for Tom Noonan to shed any tears. The 47-year-old is in the business of selling the remains of failed high-tech firms, and earlier this fall he auctioned off what was left of Appian, an Acton, Mass., maker of Ethernet-over-SONET gear.
“I classify the auctions as more of a rebirth and an opportunity for other companies to grow,” says Noonan, founder, president and chief auctioneer of Advanced Assets Services, a 10-year-old Woburn, Mass., outfit. “People who haven’t seen each other in a while meet up at these auctions, and I have heard of companies being started from those meetings.”
Noonan says the number of such auctions across the country has leveled off to about three or four per month in the past year and a half, whereas a few years ago you could find one almost every day. Advanced Asset Services operates globally with field offices in Connecticut, Utah and England. The firm has recovered more than $1 billion in equipment costs from products and equipment sales from Cereva, AT&T and Bull, to name a few. It also has handled auctions for aerospace and manufacturing businesses, the firm’s Web site says. Noonan says most of his company’s business is generated by word-of-mouth recommendations and keeping close contact with the venture capital community.
Appian, which raised about $80 million of venture capital during a five-year run that ended in January, outlasted many of its optical network equipment brethren whose fortunes peaked and then crashed along with much of the rest of the telecom industry in recent years.
The Appian auction had a business-like feel. Former company workers were nowhere to be seen. As Noonan says, “the human element” has largely been removed from companies once he is on the scene.
Eighty or so potential buyers milled about the company’s offices, sat in previously used chairs and nosed through vacant cubicles that in some cases still had little personal artifacts – such as the obligatory Dilbert cartoon – on the walls. On the floor, Appian Frisbees intermingled with framed industry magazine covers from 2000 touting Appian’s potential success: Americas Network Hot 100, Upside Hot 100.
Stepping to the podium against a backdrop of gloomy, rainy skies northwest of Boston, Noonan went over the auction’s ground rules. Among other things, he implored winning bidders for computer systems to delete any software or company information found on the machines. A sidekick, meanwhile, monitored a Webcast version of the auction that enabled those not in the room to bid on items in near real time.
Then off Noonan went, breaking into an almost sing-song, rapid-fire number-calling technique that he credits to his experience during college as the lead singer for a local rock band called The Blowouts. “Now I just substitute numbers for lyrics,” he says.
“Whaddayasay-we-gotta-$200-bid on this Dell PC . . . 200, 200, 200, c’mon-we-get-$250? We got $250. 250, 250, we got $300. $300, $300, $300 that’s it? $300? Going once. Twice. All yours in the front row,” Noonan barked.
The auction featured 468 “lots” of items. Cisco Catalyst 6500 routers, attracting offers in the thousands of dollars, topped the bidding, which lasted four hours. Noonan declined to talk about how much money any particular auction brought in but noted that when intellectual property is included, auctions can make “well into the six-figure range.” His company did not offer Appian’s intellectual property.
While Noonan doesn’t keep track of what happens to goods sold, he says he likes to think they will help new entrepreneurs. “Auctions are sexy vehicles that attract a lot of people, people who want to be part of the next hot start-up,” he says.
Others agree with that assessment – particularly in the hotbed of start-ups that is Massachusetts.
“The equipment that you get from these auctions is a great way for a new company to jump-start their offices and labs. Given all the start-ups in Massachusetts over the years, I’m sure that some of the gear – lab benches, etc. – have been used by five or 10 different companies,” says start-up veteran Chad Dunn, who most recently was with WaveSmith, a company bought by Ciena last year for $178 million. “No question that these auctions serve an important function in the high-tech ecosystem here in the area.”
