Auction company ADESA, Inc. has signed a definitive agreement to acquire the equity of OPENLANE, Inc., an Internet-based business-to-business automotive remarketing company, KAR Auction Services, Inc. announced. ADESA is a subsidiary of KAR.
ADESA is acquiring OPENLANE for $210 million in cash, plus an increase for excess cash on OPENLANE’s balance sheet at closing. ADESA expects to finance the transaction with available cash and proceeds from its revolving credit facility. The transaction is subject to regulatory and other closing conditions.
“OPENLANE is a natural fit for the KAR family of companies as it extends our online product offerings, provides a complementary customer base and adds talented members to our management team,” KAR CEO Jim Hallett said. “Sellers and purchasers of vehicles continue to increase their use of online remarketing platforms, and we believe that enhancing our existing suite of online services and products will further support KAR’s objective of expanding our addressable market to capture transactions that currently take place outside the traditional wholesale auction channel. This combination will allow ADESA to broaden its comprehensive end-to-end solutions for the vehicle remarketing industry and will provide opportunities for our sister companies, Insurance Auto Auctions and AFC.”
ADESA expects OPENLANE to generate about $100 million in revenue and sell more than 300,000 vehicles to auto dealers in 2011. OPENLANE CEO Peter Kelly will continue to work for the company and will report directly to Hallett.