The deal will allow KAR to focus on its own online dealerships and allow Carvana to gradually increase the number of cars and trucks it can prepare for sale each year.
Carvana acquired ADESA US from KAR Global for $ 2.2 billion. KAR, a wholesale auction provider from Carmel, India, agreed to sell the physical auction block in late February.
The deal transfers Carvana keys to 56 ADESA facilities across the United States, with a total area of about 6.5 million square feet of buildings on more than 4,000 acres. It also provides Carvana with all staff and work in 56 locations, as well as exclusive use of the ADESA.com market in the US
“We aim to use this ADESA US alignment both to improve the ADESA US physical auction customer experience and to focus on significant and sustainable efficiencies, as well as to improve the unit economy so that Carvana catapults back into rapid profitable growth as the industry inevitably revives.” , – Carvana CEO Ernie Garcia said in a press release.
“We believe that the future is digital, and the transition of channels to digital channels in our industry is gaining momentum,” said KAR Global CEO Peter Kelly in a press release. “Now KAR has a better position than ever to lead this evolution and seize the vast opportunities ahead.”
Carvana shares fell 16.6 percent on Monday, but rose 0.6 percent to $ 39.02 in pre-market sales on Tuesday.
The deal closes a few weeks after Carvana’s announcement a disappointing first quarterin which the company recorded a net loss of $ 506 million and sold fewer vehicles than planned, due to rising interest rates, declining consumer confidence and other tricks felt across the industry.