Online vehicle retailer Carvana is set to acquire ADESA’s physical auction business in the United States for $2.2 billion, the company announced in a filing.
- Under the agreement, Carvana will continue to operate ADESA US’s wholesale auction business and related services under the ADESA brand, with President John Hammer and senior and executive officials transitioning to Carva upon closing.
- The deal will be made in cash, as Carvana said it has secured some $3.275 billion in financing from JPMorgan Chase Bank NA, and Citi. The funds will also cover $1-billion worth of improvements of US operations via debt financing.
- Carvana will benefit from the transaction with a boost on its annual production capacity by approximately 2 million units to 3 million. ADESA US raised over $800 million of revenue and over $100 million of EBITDA in 2021.
- Carvana Founder and Chief Executive Ernie Garcia said the transaction will also benefit retail customers, as it will provide better value and faster delivery times while giving more access and “better experiences.”
Some 78% of Americans will be located within 100 miles of a Carvana inspection and reconditioning center once ADESA’s sites are fully established. CVNA is down 0.77%.