Liquidity Services to buy GovDeals

Liquidity Services Inc. plans to purchase Information Management Specialists Inc. and its GovDeals Inc. unit for about $10 million cash.

The acquisition is expected to strengthen LSI's business by adding 1,400 government agency clients, about 80,000 registered buyers and a network of relationships to support new public-sector business initiatives, LSI said.

GovDeals is an online auction marketplace for the sale of surplus and confiscated items for state and local governments, school boards, and public utilities.

In addition to gaining a sales force focused on building long-term relationships with state and local agencies, GovDeals' business model allows sellers to list their own goods for sale on a consignment-fee basis, LSI said.

The acquisition will allow GovDeals' sellers to use LSI's menu of optional services to increase savings, improve cycle times and boost revenues, LSI said.

LSI intends to retain GovDeals' management team and employees after the deal closes in January 2008.

Information Management Specialists is located in Montgomery, Ala. LSI, based in Washington, provides technology solutions to manage and sell surplus assets.