There was big news in the auction world this week, when auction services firm Adesa announced it had signed a definitive agreement to acquire Openlane, an Internet-based business-to-business automotive remarketing company for $210 million.
In a prepared statement by KAR Auction Services, Adesa’s parent company, the company said Openlane’s current CEO Peter Kelly will remain in that role and report to KAR’s CEO Jim Hallett.
“OPENLANE is a natural fit for the KAR family of companies as it extends our online product offerings, provides a complementary customer base and adds talented members to our management team,” said Hallett. “Sellers and purchasers of vehicles continue to increase their use of online remarketing platforms, and we believe that enhancing our existing suite of online services and products will further support KAR’s objective of expanding our addressable market to capture transactions that currently take place outside the traditional wholesale auction channel.”
Hallett says the acquisition will allow Adesa to broaden its offerings for the vehicle remarketing industry and provide opportunities for sister companies, Insurance Auto Auctions and AFC.
For his part, Open Lane CEO Peter Kelly says the company will benefit from the added resources. “I am looking forward to working with Jim and joining the KAR management team,” said Kelly.
The transaction is subject to certain regulatory and other closing conditions. The company says it expects to finance the deal with available cash and proceeds from its revolving credit facility.
The company says Openlane is expected to generate $100 million in revenue and sell more than 300,000 vehicles to automotive dealers through its online auction services platform in 2011.
