KAR Auction Services, Inc. [NYSE: KAR] revealed that it has inked an agreement to buy CARWAVE. CARWAVE has gained recognition as an online dealer-to-dealer marketplace including certified mechanical inspections, buyer guarantees, and a 24/7, direct offer trading format with semi-weekly live auctions.
It has been disclosed that after the execution of the deal, the purchase will build on KAR’s steady growth in the dealer-to-dealer segment. It will improve KAR’s position in the highly fragmented wholesale used vehicle market. Moreover, the firm believed that it would speed up the overall transformation of the firm to a digital marketplace firm.
Furthermore, KAR believed that this purchase would promote its clear growth strategy in the dealer-to-dealer segment. It will also speed up the positive momentum that the firm has continued over the past several quarters. The purchase will improve its continued growth in all of these areas. While also offer each corporation’s unique customers greater choice through an increased buyer and seller base.
Additionally, after the transaction executes, key CARWAVE leadership including co-founders John Lauer and Bill Lauer will continue their position in the firm. Moreover, KAR plans to continue to run CARWAVE’s Escondido, California headquarters.
The buying price of the purchase is $450 million. The deal will close before year-end awaiting the necessary legal and regulatory authorizations. Winston & Strawn LLP is acting as legal advisor to KAR Global. Latham & Watkins LLP is acting as legal advisor to CARWAVE.