KAR Auction Services acquired CARWAVE Holdings LLC.
CARWAVE is an online dealer-to-dealer marketplace featuring certified mechanical inspections, buyer guarantees and a 24/7, direct-offer trading format with semi-weekly live auctions. Upon closing, the acquisition will build on KAR’s consistent growth in the dealer-to-dealer segment, enhance KAR’s position in the highly fragmented wholesale used vehicle market and accelerate the company’s overall transformation to a digital marketplace company.
“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,” said Peter Kelly, CEO of KAR Global. “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.”
CARWAVE was founded in 2009 in California and currently serves a broad network of franchise and independent dealers across Arizona, California, Nevada, Oregon and Texas.
After the transaction closes, key CARWAVE leadership including co-founders John Lauer and Bill Lauer will remain with the company, and KAR intends to continue operating CARWAVE’s Escondido, Calif., headquarters.
The purchase price of the acquisition is $450 million, and the transaction is expected to close prior to year’s end pending the requisite legal and regulatory approvals.
