Carvana to acquire US physical auction business of ADESA for $2.2bn
Carvana, an online used car retailer, has agreed to acquire ADESA U.S., the US physical auction business of ADESA, a fully-owned subsidiary of KAR Global, for $2.2 billion in an all-cash deal.
ADESA U.S. is a provider of wholesale vehicle auction solutions in the US. It has 56 sites and nearly 4,500 corporate and operations team members. Last year, ADESA U.S. is said to have facilitated over a million transactions through the sites, which total around 6.5 million square feet of buildings on over 4,000 acres.
Ernie Garcia — Carvana Founder and CEO said: “We are thrilled to welcome ADESA U.S. to the Carvana family. Together with Carvana’s existing operations, ADESA U.S.’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 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.”
Online used car retailer Carvana to acquire US physical auction business of ADESA for $2.2bn. Photo courtesy of Business Wire.
The footprints of Carvana and ADESA U.S. are said to be largely complementary and their combination extends the collective reach of the two businesses, said the former.
The existing and potential reconditioning operations of ADESA U.S. can contribute nearly two million incremental units to its annual production at full utilization, said Carvana.
John Hammer — President of ADESA said: “ADESA and Carvana are committed to ensuring a smooth, seamless transition for the ADESA U.S. physical auction customers.
“We look forward to bringing our innovative teams together and combining the power of our physical auction and retail capabilities to better serve buyers, sellers and consumers across the automotive industry.”
Carvana said that it will continue operating ADESA U.S.’ existing wholesale auction business and related services under the brand name of ADESA.