Pharmaceutical Equipment Market Values with Adam Covitt of Federal Equipment Company

Tuesday, December 22, 2020 | Blackbird TV

Adam Covitt of Federal Equipment Company joins us to discuss pharmaceutical equipment market values.

About this segment of Blackbird TV

Guest: Adam Covitt, President, Federal Equipment Company. To learn more about our guest, visit, or call 888-764-3455.

Recorded: November 16, 2020

Published: December 22, 2020

Segment transcript

Joining me on this segment for Blackbird TV is Adam Covitt. Adam is with Federal Equipment out of Cleveland, Ohio Adam. Good morning. Good morning. How are you, Dave? Everything is great. I hope you’re well. What are you seeing right now in the pharmaceutical space relative to current values for equipment and how is Covid maybe having an impact on that? What do you seeing, man? So our auctions and our ability to buy equipment has been affected Customers, I think are.. first of all, new equipment OEMs are slow to deliver right now, with all the factories being shut down in Italy and Germany in Europe where most of our equipment purchases come from. The manufacturers are having trouble manufacturing and delivering equipment, especially in sectors like for API Pharmaceuticals, which are essentially chemicals that go into Pharmaceuticals activated pharmaceutical ingredients sterile. so injectables, for vials and syringes, you can’t touch any of that equipment right now and then, you know tanks liquid fillers because of what essentially went on with hand sanitizers the scramble for companies to put hand sanitizers in place and try to catch up to the marketplace so values of that those sectors of equipment or just drastically going higher, you know, there’s no used equipment available on the market our auctions are bringing higher numbers than ever anticipated. The corona crisis has been causing some some, you know changes to the things we normally do. We just finished a very remote auction on an island in the UK last week for one of our biggest clients Pfizer. And obviously it was a it was a sterile packaging facility on an island very difficult location, but a hot sector hot segment of equipment but we couldn’t have customers. We normally would have customers all over Europe. We’d have customers from China from India fly in to inspect the equipment so we had to adjust the way we do things normally and what we did was we had two days of video inspection and appointments for the auction. So customers have requested. We have a man in the UK. We had them there for two days customers were request a video appointment and he would walk around and show them the equipment at the facility. So coming up with new innovative things to keep up but the bidders were there and the numbers exceeded what we had anticipated. Well, I’ll say that that’s the same in a lot of other segments and it’s particular to you know, specific bits of equipment. Some things are very difficult to sell right now, but I’m finding the generally prices remain strong across multiple segments in multiple industries and just like you indicated it’s driven in part by demand, but it’s also driven inI part because new equipment has been backlogged due to furloughs and shutdowns within OEMs. So that’s putting positive price pressure on simple supply and demand factors, right? Absolutely. Absolutely, especially lab assets which are you know, commodity type thing for us HPLCs mass spec coming out of pharma. You know, normally you’d think they’d sewn pharma but we’re seeing a vast array of other clients and other sectors buying the equipment just because they can’t get their hands on anything right now fascinating and we’re certainly an uncharted waters Adam. Let me ask you how does this transmit over to a Blackbird Auctions client a secured creditor a bank that’s got a secured position and equipment it does this look good for their collateral or does this look bad? You know, I wish I had a crystal ball and I could tell you that that the bubble isn’t going to burst but right now I mean we’re telling customers our numbers are far exceeding our anticipated value at auction. Will it continue.? I don’t know. I mean it just seems like maybe maybe the other factor right now because it’s before the end of the year, we find that a lot of our clients have budget left to spend. They’re not sure what kind of budget they’re going to be allocated next year. So they’re trying to get rid of all those funds and make sure they secure equipment that they need a lot of our clients and anticipation of having the vaccine or supporting the efforts for the vaccine are building up their stockpiles of equipment the other side of the coin is a lot of our clients that normally would sell used equipment, you know, just because they have another project coming up we find they’re holding onto things. So it’s causing us. It’s making it more difficult for us to buy equipment or lock down auctions therefore creating a shortage on that side as well. Which supports collateral values, which is really the answer that I’m looking for. We’ve got strong collateral values in the middle of a pandemic. Covid collateral is strong, Adam, Thanks for your time. Absolutely great. Great to be here. Thanks for having me.