KAR Acquires 50% Stake in Toronto-Based TradeRev
Continuing a flurry of significant industry moves, KAR Auction Services announced Tuesday that its business unit ADESA has acquired a 50-percent stake in Toronto-based Nth Gen Software and its online vehicle remarketing system, TradeRev.
KAR officials indicated the total purchase price for the transaction is approximately $30 million in cash.
ADESA also announced that it has 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.
ADESA president and chief executive officer Stéphane St-Hilaire explained TradeRev is an online automotive remarketing system where dealers can launch and participate in real-time vehicle auctions at any time from their mobile devices or desktop.
“TradeRev allows dealers to obtain instant bids while the retail customer is sitting in the showroom by providing a private, customized network for buyers and sellers that quickly and efficiently moves fresh trades,” St-Hilaire said.
“We acknowledge that dealers are using technology more and more to buy and sell cars,” he continued. “In that regard, TradeRev is a natural evolution in the dealer-to-dealer space which includes approximately 20-22 million transactions a year.”
Mark Endras, the president, founder and creator of TradeRev, and the company’s management team own the other 50 percent interest in TradeRev.
“We have long admired ADESA’s ability to deliver simple, consistent solutions in the used-vehicle market and the company’s capability to provide a broad network of users across Canada and the United States,” Endras said.
“TradeRev has always believed in providing dealers and wholesalers cutting-edge technology to enable them to create new efficiencies within their operations,” he continued. “Partnering with ADESA will allow us to share our innovative TradeRev technology with even more customers across North America.”
Registered dealers list vehicles in a TradeRev auction, and participating buyers get an instant notification of new vehicles as they are posted.
“This system also has a variety of sales tools, as well as immediate analytics for accurate vehicle appraisals,” officials said.
Founded in 2009, TradeRev currently operates throughout Canada and in some U.S. states.
The news involving ADESA and TradeRev comes on the heels of AutoTrader.com naming Jared Rowe as its new president and Gannett Co. signing an agreement to become the sole owner of Cars.com. Those reports from Auto Remarketing can be found below:
KAR’s Q2 Results
In other company news, KAR also reported its second-quarter performance on Tuesday, highlighting jumps in revenue, adjusted EBIDTA, net income and adjusted net income.
KAR’s Q2 revenue climbed to $585.6 million, up from $541.4 million for the second quarter of 2013, marking an increase of 8 percent. Adjusted EBITDA for the quarter that ended June 30 increased 10 percent to $154.1 million, compared to $140.2 million for the second quarter of last year.
The company’s Q2 net income spiked 52 percent to $50.8 million, or $0.36 per diluted share, as compared with net income of $33.4 million, or $0.24 per diluted share, in the second quarter of last year.
KAR also mentioned that its adjusted net income per diluted share for the quarter increased 24 percent to $0.42 versus adjusted net income per diluted share of $0.34 in the second quarter of last year.