Carmel-based KAR Global on Feb. 24 announced a pending agreement to sell the company’s ADESA U.S. physical auction business to Carvana for $2.2 billion. The sale will allow KAR to focus on its portfolio of digital marketplaces, and proceeds will be used to rescue corporate debt.
Approximately 4,500 ADESA and KAR employees will transition to Carvana, including more than 1,000 based in central Indiana in the Carmel headquarters and Plainfield auction business. The employees will not be required to relocate.
The sale includes all auction sales, operations and staff at 56 ADESA U.S. vehicle logistics centers and exclusive use of the ADESA.com marketplace in the U.S.
“KAR has always been a leader in the digital transformation of remarketing, and this transaction firmly positions us as the premier digital marketplace provider for wholesale used vehicles,” KAR Global CEO Peter Kelly stated. “While off-premise sales have increased over the past decade and represent over 50 percent of our vehicle sales today, we believe we are still in the early stages of this industry evolution, and the trends are rapidly gaining momentum. Digital marketplaces provide low cost, highly efficient venues for our sellers and buyers to transact, and our leading digital brands, platforms and technology position us well to grow as digital penetration increases.”
KAR will serve as a technology partner to Carvana, and it will continue to operate its OPENLANE platform and BlacklotCars, CARWAVE and TradeRev dealer-to-dealer businesses. It is not selling its ADESA businesses in Canada, Europe and the U.K.
The transaction is expected to close in the second quarter of this year.