UCN
Used Car News
3/7/2022
KAR, Carvana Announce Megadeal By Jeffrey Bellant
Carvana signed a definitive agreement to acquire ADESA’s U.S. physical auction business, a wholly owned subsidiary of KAR Global, subject to customary closing conditions, for $2.2 billion in cash, the company announced. “This is a historic transaction for KAR,” Chief Executive Officer Peter
“We are thrilled to welcome ADESA U.S. to the Carvana family,” said Ernie Garcia, Carvana founder and CEO. “Together with Carvana’s existing operations, ADESA U.S.’ nationwide infrastructure network and robust, highly profitable business will accelerate Carvana’s progress toward becoming the largest and most profitable automotive retailer. “Over time, we will leverage our
lief. The goal is to build the “world’s biggest digital marketplace for used vehicles.” Kelly said KAR Global has always been a leader in the digital transformation of its industry and the Carvana deal will help maintain and extend that position. “The transaction will also enhance our financial profile, eliminating nearly all of our corporate debt,
combined infrastructure and complementary expertise to deliver even better selection, better value, and faster delivery times to our retail customers while simultaneously raising the bar and providing more access and better experiences to our wholesale customers.” Proceeds of the transaction will be used to reduce KAR’s corporate debt. The move represents KAR pushing all its chips into the digital pot. “We believe in a digital future for our industry,” Kelly said. “All the trends we’re seeing and experiencing in our business support that be-
streamlining our operating structure and enabling a faster long-term growth rate at KAR,” Kelly said. The deal, when finalized, will allow KAR to “lead and win in the fastest-growing segments in our industry, Kelly added. Kelly said the trends across all industries point to an all-digital world. Used vehicles at the retail level and wholesale level represent this trend. He said at KAR, commercial seller volumes have migrated to digital channels over the past decade. For example, last year some of Continued on page 9
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Kelly said during an investor presentation on Feb. 25. “I believe it’s a transaction that will be transformative for our company, customers, our employees and our stockholders.’ ADESA U.S. is the second largest provider of wholesale vehicle auction solutions in the United States with 56 sites and approximately 4,500 corporate and operations team members. In 2021, the ADESA U.S. business facilitated more than one million transactions through those sites, which total approximately 6.5 million square feet of buildings on more than 4,000 acres.