B. Riley Financial, Inc. (NasdaqGM:RILY) ("B. Riley" or the "Company") announced that it has retained Moelis & Company LLC as an independent financial advisor to assist in its review of strategic alternatives for the Company's Appraisal and Valuation Services, and Retail, Wholesale & Industrial Solutions businesses (collectively formerly known as "Great American Group"), which could include a potential sale or other transaction. B. Riley acquired Great American Group ("Great American") through a strategic combination in 2014. Since that time, B. Riley has substantially grown Great American's appraisal and retail liquidation business, which together, generated approximately $153 million in revenue and approximately $35 million in operating income for fiscal year 2023, a year over year increase of 35% and 69%, respectively.

This business is currently carried on the Company's balance sheet at a book value of approximately $35 million. Bryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, commented: "Great American is a tremendous business with a strong management team that has successfully executed on a number of organic growth initiatives over the last 10 years. Our appraisal unit has delivered strong and steady recurring EBITDA year after year, and we believe this business is poised for meaningful growth.

Strategic and financial buyers are looking to acquire specialized financial services that deliver robust free cash flow at attractive margins. As we've stated since the beginning, we use our balance sheet to acquire quality businesses that we can build over the long term. This is one example of many such businesses where significantly increased valuation is not reflected on our balance sheet, and we have the ability to unlock this value when it best serves our shareholders." Proceeds from a potential transaction, if one were to be consummated, may be used in a variety of ways including de-levering B. Riley Financial's balance sheet, repurchasing shares and bonds in the open market, and investing in the platform and in particular, B. Riley Securities, the cornerstone of the Company's diversified platform.

Michael Marchlik, Co-Chief Executive Officer of B. Riley Advisory Services, and Scott Carpenter, Chief Executive Officer of B. Riley Retail, Wholesale & Industrial Solutions, added, "Since joining Great American Group in the late 1990s and becoming part of B. Riley in 2014, we have built an industry-leading set of offerings across asset appraisal, valuation, and disposition services. We're incredibly proud of the work we do on behalf of our clients and we believe there's no firm today that offers the combination of experience and expertise that we do. Our business has the ability to expand into several new verticals and will continue to be a proprietary sourcing mechanism for high quality lending and investment opportunities.

We remain committed to delivering for our clients and continuing to provide the high quality service they have come to expect from us." B. Riley has not set a deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any particular outcome. The Company does not intend to comment further regarding the review until it determines disclosure is necessary or advisable.