KAR Global’s blockbuster sale of its ADESA U.S. auto auction business to Carvana has officially closed, KAR said Tuesday morning.
The sale includes include all auction sales, operations and staff at 56 ADESA U.S. vehicle logistics centers in the U.S.
Carvana will also now operate the ADESA.com marketplace in U.S.
The deal was first announced in February.
“We believe the future is digital, and the channel shift towards digital across our industry is gaining momentum. KAR is now better positioned than ever to lead this evolution and capture the broad opportunities ahead,” KAR chief executive officer Peter Kelly said in a news release.
“Our new, more simplified business model allows us to focus our strategy, energy and investments on developing and deploying the digital solutions our customers want, need and value the most,” Kelly said. “We believe expanding our capabilities and the portfolio of services we provide will generate the greatest benefits for those customers, increase our market share and, ultimately, deliver the greatest value to our shareholders.”
KAR will continue to operate its OPENLANE platform, as well as its digital dealer-to-dealer businesses. The latter includes BacklotCars and CARWAVE in the U.S., as well as TradeRev in Canada.
The ADESA Canada, ADESA UK and ADESA Europe businesses, along with KAR’s affiliated inspections, transportation and other services brands like AFC, remain part of KAR.
The company will provide more details on its strategy and projections in an analyst day update call, which it anticipates happening next month.
In a news release Tuesday morning, Carvana found and CEO Ernie Garcia said: “This alignment with ADESA U.S. will further strengthen our foundation for growth and provide us with significant flexibility to execute our plan through a wide range of macroeconomic scenarios. Despite the recent industry slowdown, Carvana continues to grow and deliver exceptional experiences to an increasing number of customers.
“We aim to use this ADESA U.S. alignment to both improve the experiences of the ADESA U.S. physical auction customers and to focus on significant and sustainable efficiencies, and unit economic improvements, for Carvana to catapult back into rapid profitable growth as the industry inevitably rebounds.”
ADESA president John Hammer added: “We are committed to ensuring a seamless transition for the ADESA U.S. physical auction customers. We’re excited to collaborate to more positively impact the largest retail sector in the country, especially as we combine our physical auction and retail capabilities to better serve buyers, sellers and consumers across the automotive industry.”