What is Going on with KAR?
KAR Auction Services (KAR) has announced that they have signed a definitive agreement to acquire CARWAVE Holdings LLC conditional to the regulatory approvals and other customary closing conditions. CARWAVE leadership (including co-founders John Lauer and Bill Lauer) will remain with the company and it will continue to operate from CARWAVE's Escondido, California headquarters. KAR stock rose 3.84% to $17.45 per share Monday morning.
Carwave is an online dealer-to-dealer marketplace that features certified mechanical inspections, buyer guarantees and a 24/7, direct offer trading format. CARWAVE also has semi-weekly live auctions.
What Does This Mean for KAR?
This acquisition is beneficial to both KAR Auction Services and CARWAVE, as expressed by Peter Kelly, CEO of KAR Global. Kelly States, “This acquisition will advance our clear growth strategy in the dealer-to-dealer segment and accelerate the positive momentum we've sustained over the past several quarters. CARWAVE has a strong, active dealer network in California — the country's largest wholesale automotive market, as well as a growing presence in Arizona and Texas. The acquisition will enhance our continued growth in all of these areas while providing each company's unique customers with greater choice through an expanded buyer and seller base. CARWAVE's asset-light, technology-forward business model, with approximately 100,000 vehicles sold over the past 12 months, will enable us to continue driving innovation, achieve immediate profitability across our dealer-to-dealer offerings and enhance our position in the highly competitive dealer-to-dealer space."
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KAR Auction Services Inc offers a total package for wholesale-used car transactions, from salvage and used-car auctions to a broad range of financial and logistical support. The services comprise financing, repossessions, repairs, transportation, warranty, and inventory services. Kar has three business units in the United States and Canada: Adesa, Insurance Auto Auctions, and Automotive Finance. Adesa operates used-vehicle auctions and offers complete online services for all parties involved. Insurance Auto Auctions is a salvage-auto auction company serving the total-loss needs of insurance companies, lease companies, and rental companies. Automotive Finance provides inventory financing and business services, mainly to independent used-vehicle dealers.
