KAR Auction Services (KAR Global) has signed an agreement to acquire the app/web-based dealer-to-dealer wholesale platform known as BacklotCars Inc. for $425 million, pending regulatory approvals and closing additions.
The platform features a 24/7 “bid-ask” marketplace and vehicle inspections performed by auto mechanics. The acquisition would build on the KAR’s TradeRev auction platform and offer dealers more choice, enhanced transparency, and access to more buyers and sellers.
“BacklotCars has grown rapidly in the highly competitive dealer-to-dealer space and is the perfect complement to our current capabilities and footprint,” said Jim Hallett, Chairman and CEO of KAR. “I’m confident the addition of Backlot’s leadership, technology, and exceptional customer-service model will quickly benefit our combined customers, enhance KAR’s competitive position and accelerate growth for both organizations.”
BacklotCars was founded in 2015 in Kansas City; it currently serves dealers in 46 states across the United States. In its news release, KAR said the company’s platform and marketplace were specifically designed to address dealer pain points connected with digital transactions — things like certified inspections, integrated transportation, and dealer financing options.
With the platform, buyers can engage when and where they want, and full transparency is provided between buyers, sellers, and bidders. Personalized vehicle recommendations are also provided to dealer buyers.
Once the acquisition is complete, KAR intends to keep co-founders Justin Davis, Ryan Davis, Josh Parsons and Fabricio Solanes with the company.
“We’re excited to expose Backlot sellers’ inventory to KAR’s active buyer base while expanding buyer access to quality wholesale inventory beyond their respective local markets,” said Justin Davis, co-founder and CEO of BacklotCars. “We look forward to completing the transaction and leveraging the power of our combined technology solutions and industry expertise to help our companies and our customers succeed.”
