KAR Auction Services already shelled out $30 million to acquire a 50-percent stake in online vehicle remarketing system, TradeRev. And investment analysts wondered if KAR is ready to bring out the company checkbook or credit card again to buy the remainder of Toronto-based wholesale solution firm or another company outside of its current portfolio of ADESA, Insurance Auto Auctions and Automotive Finance Corp.

While also reminiscing about his franchised dealer days when discussing TradeRev, chief executive officer Jim Hallett mainly kept company strategy close to the vest when KAR conducted its quarterly conference call this past Wednesday.

“We do have other deals in the pipeline in our other businesses as well, but nothing that we're in a position to discuss today,” Hallett said during his opening comments of the call that later consisted of plenty of discussion about how TradeRev and ADESA can boost both service for dealers and profits for the company.

Later, Hallett touched on the acquisition issue again when questioned by the investment community, which cheered the company’s overall second quarter performance that included increases in revenue, adjusted EBIDTA, net income and adjusted net income.

“In terms of other acquisitions, I think we're always looking at different businesses, how they fit both from a strategic standpoint, as well as how they might fit from a technology standpoint, and then perhaps the geographic standpoint. We're evaluating these businesses … one at a time,” Hallett said. “We prioritize them. They don't always go down as we think they’re going to go down.

“But at the end of the day, there are a number of businesses that we continue to focus on that would tuck-in very nicely,” he went on to say.

Besides the solution’s wholesale market capabilities, KAR chief financial officer and executive vice president Eric Loughmiller pointed out valuable parts of the TradeRev acquisition deal are the possibility that KAR can acquire the remaining ownership portion as well as keeping the previous management team in place — similar to the strategy when KAR bought OPENLANE.

“We have some rights at the right time to perhaps increase our ownership. And we'll see how that plays out,” Loughmiller said. “And at any point in time, you can always buy the rest of it if they’re willing to sell it at the right price, right? But being part of this it's really important to us in keeping the management team in place, the founders and their technology skills and their knowledge of the market.”

Hallett elaborated about the value of TradeRev’s management, which includes president and founder Mark Endras.

These guys first got started in 2009, so this is technology that they've been working on and developing and have learned a lot of lessons as they’ve developed it,” Hallett said. “And it was really critical for us to keep them in the deal. Keep the founder in the deal, and he kept his entire management team in place. I think that's what they bring to the table,

“From the ADESA side, when you think about our locations and our people and our resources, we can really pour the gasoline on this thing and get it to the market and hurry,” he added.

ADESA already entered into a joint marketing agreement with TradeRev to assist in expanding its footprint in the dealer-to-dealer online space in the U.S. and Canadian markets.

The company highlighted ADESA will be the exclusive provider of certain products and services to TradeRev’s customers. Officials added that ADESA will also leverage its 65 auction locations across North America and the company’s strong online auction presence and dealer network to support TradeRev’s diverse dealer offerings.

“TradeRev is a company that we identified that was operating in Canada. We thought it was a unique business model, and saw that it was focused on what I would call an addressable market that we currently didn't feel that we were getting a slice of. It was just opportunistic that we got involved in conversations, and we ended up acquiring 50 percent of the business. It was really the strategic rationale of bringing this component of the business into the KAR family,” Hallett said.

“I believe that the combination of TradeRev and ADESA will create opportunities to expand our buyer base throughout the entire organization,” Hallett went on to say. “TradeRev creates private, customized network of buyers and sellers to move fresh trades. TradeRev is a solution that addresses the 20 million units to 22 million dealer-to-dealer transactions that don’t currently come to a physical auction. We estimate that as many as half of these vehicles are sold on a dealer-to-dealer basis, and what TradeRev will do is TradeRev will stand in the middle of these transactions much like we do in our online and physical auctions.”

Since Hallett is a former dealer, he also described how TradeRev is a solution geared to make things easier for busy managers. Dealers can get started by scanning the VIN and taking a few pictures with their mobile device. Then, the auction process is in motion.

“Dealers are going to have the ability to close more sales because they're going to have stronger appraisals on these cars. And they're also going to reduce the risk of loss at the time when comes to selling those trade-ins,” Hallett said.

“And I can tell you that, as a former franchise dealer, I would absolutely love to have a tool like this,” he continued. “When I think about my time and the efficiency that I spent calling wholesalers and trying to get bids and trying to get appraisals on cars, and then when I think about the lost opportunities, the number of deals that I wasn't able to close because I wasn't able to get what I would call an accurate appraisal on the car, certainly it prevented me from getting some deals done.

So, with TradeRev, I think this is a good example of the type of strategic growth that we are pursuing,” Hallett went on to say.