$8.5M Acquisition Bolsters Heritage Global’s Financial Services Business

SAN DIEGO – Asset services company Heritage Global Inc. (Nasdaq: HGBL) announced early this month that it acquired The Debt Exchange Inc. for $8.45 million cash. The deal closed Jan. 9.

Heritage Global, which had revenue of $45.4 million in 2024, splits its business between reselling financial assets and reselling the assets of industrial companies. The Debt Exchange, based in Newton, Massachusetts, specializes in reselling mortgages.

“We thought it was a growing market we should be in,” said Ross Dove, CEO of Heritage Global, in an interview last week (Jan. 22). “We think it’s a cultural fit and we think we can grow it.”

Going forward, The Debt Exchange will be known simply as DebtX.

An estimated $1 trillion in commercial real estate mortgages will come due in two to three years, Dove stated. “A lot will need to be moved out of banks to special servicers.”

In the financial services sphere, DebtX joins an existing Heritage business, National Loan Exchange Inc. or NLEX. That business deals in consumer loans, including auto and credit card loans and fintech products. NLEX is based in St. Louis.

Following the acquisition, DebtX will continue to be managed by its existing leadership team. It will ultimately be led by DebtX co-founder Bruce Hounsell.

DebtX brings a comprehensive suite of services to Heritage Global, including real estate loan-portfolio advisory and valuation, proprietary market-transaction data, and end-to-end execution support for banks, specialty-finance companies, government agencies and institutional investors.

Co. Puts Down Roots in San Diego

Locally, Heritage Global is making another move. It has bought its own building on Nancy Ridge Drive in the Miramar/Sorrento Mesa neighborhood and is in the process of relocating its San Diego headquarters. The new building is larger than its previous space — upward of 15,000 square feet — and it has warehouse space in addition to offices.

Heritage Global oversees 200 to 300 auctions of industrial assets per year, so warehousing is one of its concerns.

“We’re really making a statement,” Dove said. “We’re staying in San Diego.”

Sorrento Mesa is a logical location for the company since many of its neighbors are biotech businesses, and the lion’s share of Heritage Global’s San Diego County business involves used biotech equipment. “It’s 90% of what we do here,” Dove said. “It’s our identity.”

The business has also sold surplus military and defense contractor equipment; trucks and other logistics equipment; and the assets of craft breweries whose business may have dried up. In short, the business diverts useful industrial assets from landfills.

One of the more unusual auctions Heritage Global has lined up is set for March 16.

Bidding will be on factory equipment previously used by an Oregon maker of premium N- and Z-scale model trains. Despite the name, the assets of Micro-Trains Line are hefty. They include several makes of plastic injection molding machines ranging from 12 tons to 150 tons, various milling machines, lathes and computer numerical controlled (CNC) vertical machining centers. Family-owned Micro-Trains sold its molds, tooling and IP to New Jersey-based Atlas Model Railroad Co. Inc., which has a global supply chain. Terms of the sale were not disclosed.

The business is much more than biotech.

“Every month there’s something different and new and unique,” Dove said.

Heritage Global Inc.
FOUNDED: Incorporated 1983 as MedCross Inc.; the business traces its roots back to 1937 when Harry Ross founded Ross Mercantile Co. in San Francisco
CEO: Ross Dove
HEADQUARTERS: San Diego (Sorrento Mesa)
BUSINESS: Asset services company specializing in financial & industrial asset transac-tions, including auctions
EMPLOYEES: About 100
STOCK: HGBL (Nasdaq)
REVENUE: $45.4 million in 2024
WEBSITE: hginc.com
CONTACT: (858) 847-0659
NOTABLE: The business worked in the aftermath of the California Gold Rush, auctioning the assets of the Central Eureka Mine in the Sierra Nevada in the 1950s.