Carvana, the auto industry pioneer for buying and selling cars online, has signed a definitive agreement to acquire ADESA’s U.S. physical auction business, a wholly owned subsidiary of KAR Global, for $2.2 billion in cash. ADESA U.S. is the second largest provider of wholesale vehicle auction solutions in the United States with 56 sites and approximately 4,500 corporate and operations team members. In 2021, the ADESA U.S. business facilitated more than one million transactions through those sites, which total approximately 6.5 million square feet of buildings on more than 4,000 acres.
“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,” said Ernie Garcia, Carvana founder and CEO. “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.”
Carvana and ADESA U.S.’s footprints are highly complementary and combining them extends the collective reach of the two businesses, the two companies say. ADESA U.S.’s existing and potential reconditioning operations can contribute approximately two million incremental units to Carvana’s annual production at full utilization. Further, 78 percent of the U.S. population lives within 100 miles of either an ADESA U.S. or existing Carvana inspection and reconditioning center, meaning customers will have access to more vehicles with faster delivery times than ever before.
“ADESA earned its place as a respected brand in our industry because of its dedicated team and robust operations,” Garcia said. “We have long admired ADESA, having come to appreciate their approach as a customer for many years. We look forward to joining forces and continuing on the path of delivering the best customer offering for both retail and wholesale customers.”
Carvana will continue to operate ADESA U.S.’s existing wholesale auction business and related services under the ADESA brand. ADESA U.S. President John Hammer additional senior and executive leadership and teams will transition to Carvana after the deal is closed.
