John Brasher was only 14 when his grandfather and family business patriarch — who shared his first name, but went by Frank — passed away in 1986.
But his grandfather’s reputation in the business provided more than a wealth of stories for John Brasher, who shared a few of these with Auto Remarketing last month, just after ADESA agreed to purchase the family’s eight auctions.
Unable to serve in World War II because of eye damage from a car accident, Frank Brasher — whose father ran a sheep ranch and did carpentry on the side — moved from his native southern Utah to Salt Lake City and opened up a barber shop.
The shop was about 10 to 15 feet wide and 20 to 30 feet long, John Brasher estimated. At the back was a curtain, and behind it was a cot, hot plate and a sink. That’s where Frank Brasher lived.
Then the war ended, and auto manufacturing eventually ramped back up. That’s when a customer at the barber shop helped spur a business idea.
“He had a car dealer who was his customer,” said John Brasher. “He was cutting his hair one day, and this car dealer said, ‘Hey, you’ve got a lot of traffic here. Why don’t I give you this car? You put a for-sale sign on it in front of your barber shop, and if you sell it, I’ll pay you a commission.’
“And so, Grandpa did that and he got the commission, and he said, ‘Hey, this commission’s pretty good. This is like two months of haircuts. That’s a pretty good deal,’” John Brasher said.
That led to more of the same and, eventually, Frank Brasher jumping into the auto business.
Brasher got into RV sales and, his grandson says, claimed he had the first buy-here, pay-here business west of the Mississippi River
“And I never heard anyone to refute him, so I’m going to claim that it’s true,” John Brasher said with a slight laugh.
But Frank Brasher’s real passion was wholesaling cars, his grandson said, because of the quick turn.
By the late 1940s, John Brasher said, auto auctions began hitting the scene.
Frank Brasher would attend the sales, and started his own auction in 1949.
The Brasher’s family, and the multiple generations that have followed in his footsteps, have expanded the business throughout the Western U.S.
The group currently sells about 190,000 a year, said Jim Hallett —chairman and chief executive officer at KAR Auction Services, parent company to ADESA — in his company's latest quarterly earnings call.
Some six-plus decades after the family entered the auction business, the legacy will stay in place. The Brasher's auction locations will maintain their leadership. The move to sell was designed to help counter some of the logistical challenges of 10 shareholders transitioning to fourth-generation ownership, as the company describes in this letter.
“We’re all staying on,” John Brasher said. “We didn’t sell it because we wanted to get out of the business. We sold it to save the family dynamic, and to preserve our family relations. We’re staying on. This is our business. We’re not that old, and we love it. It’s our life.”
Insurance Auto Auctions recently announced the grand opening of its IAA Louisville North location in Eminence, Ky.
The new location officially opened on Feb. 22, featuring a ribbon cutting ceremony and selling more than 150 vehicles, including a 2013 Rolls-Royce Ghost that sold for $93,000.
“The IAA Louisville North facility will expand the company’s presence in the area by providing buyers and sellers with greater convenience and access to increased inventory,” said John Kett, IAA’s president and chief executive officer. “We are dedicated to strategically increasing our locations in order to better serve our existing and future customers, and this Kentucky branch adds to the company’s growing footprint in the industry, with more than 170 locations in North America.”
The new location features a 9,000-square-foot facility that sits on 30 acres of land, which the company says leaves plenty of room for future expansion.
“Along with our current locations in Louisville, Ashland, Bowling Green and Paducah, IAA recognized the need for an additional branch location to meet the region’s growing demand,” said Jeanene O’Brien, IAA’s vice president of global marketing. “Eminence also provides good access for our clients who would attend weekly auctions in person, and offers convenience to the major markets of Louisville, Lexington and Cincinnati.”
IAA Louisville North hosts its auctions every other week on Mondays. For more information, visit the IAA information page here.
Central Auto Auction will have completed its 10th year of operation this month, having opened its doors on Feb. 28, 2006.
The auction, which currently offers roughly 400 vehicles per week via its three lanes (with a fourth on the way), hosts about 200 bidders each week.
Peter Saldamarco, the auction’s founder and president, reflected on the economic and industry conditions that prevailed in the country during the auction’s first few years of business, including the challenges inherent with the government bailouts and the rising tide of recalls.
“Despite what’s going on in the world, Central has a solid foundation from which to build our business,” Saldamarco said.
ADESA Phoenix gives $19,500 to JDRF
In other auction news, ADESA recently announced it has donated nearly $20,000 to the Juvenile Diabetes Research Foundation via its philanthropic efforts at ADESA Phoenix’ Sixth Annual Legendary Sales Week events.
The several items that were sold during the charity event include a 2002 Ford Thunderbird ($16,500), a signed and framed poster depicting the evolution of Ford Mustangs over the years ($2,000) and sports and music memorabilia sold through the silent auction that procured another $1,000 in charitable donations.
“The crowd who joined us for Barrett-Jackson and our own Legendary Sales Week events brings a lot of excitement,” said Ryan Edwards, ADESA Phoenix’ general manager. “After a visit from the JDRF ambassadors — the kids actually affected with diabetes — that crowd is moved to make a difference with their generous donations. Our auction supports diabetes research all year, but this event brings lots of people into the fold. That’s why this is one of my favorite weeks of the year.”
Southeastern Auto Auction of Savannah hosts most dealers ever
The Southeastern Auto Auction recently hosted its “Cars, Cash & Caring Sale,” which resulted in a record-breaking number of dealers in attendance for one of the auction’s sales.
The sale features $25,000 in cash and prizes giveaways, including $15,000 in cash, Samsung Ultra 4K TVs, Bose sound systems, Yeti coolers, drones and more.
The sale also resulted in a donation of over $5,000 to the Shriners Hospital for Children via money raised through 50/50 drawings and an auction contribution for every transaction made over the previous five weeks.
“It was a great day for selling cars, giving away prizes and helping a great organization like Shriners Hospital for Children,” said Bill McCready, SEAA’s vice president. “Our generous dealers always come through when given an opportunity to help.”
SEAA hosts a dealer-only sale every Wednesday at 10 a.m. EST and a public sale every Thursday at 7 p.m. EST.
KAR launches volunteer program
KAR Auction Services recently announced the launch of its Leap Into Service community program to honor the upcoming Leap Day on Monday.
As part of the program, KAR is giving its full-time employees in North America eight hours of paid time off for volunteer work with the charity of their choice.
“KAR Auction Services is dedicated to serving the communities in which we live and work, and we are always looking for innovative and fun ways to give back,” said Jim Hallett, KAR’s chairman and chief executive officer. “We recognized the extra day we get this leap year as an excellent opportunity to make a meaningful difference in the many different communities we are a part of across the country.”
Remarketing of America announced the recipient of its second annual national auction of the year honor, known as the ROA BlueAward.
Based on a ranking of auctions in several key performance areas, this year’s ROA BlueAward winner is Manheim New Mexico.
“We are pleased to present the Manheim New Mexico auction house with the ROA BlueAward, national auction of the year winner, for their consistent hard work and dedication throughout 2015, setting them apart from the other auctions throughout the nation,” said Emory White, ROA’s president and chief executive officer. “The Manheim New Mexico team, led by general manager Owen Stephens, has demonstrated outstanding customer service and an amazing work ethic that can be modeled after in the industry.
“The ROA BlueAward program is our way of recognizing our outstanding auction partners who play an invaluable role in the successful remarketing of vehicles helping to ensure great returns for our financial services’ clients,” White continued.
According to ROA, the award provides auctions with valuable feedback in the following five critical areas of service:
- Percentage of sell price compared to MMR
- Time (days) to pick up
- Time (days) to prepare condition report
- Number of arbitrations
- Time (days) to release funds from sold units
Each auction receives a scorecard every quarter that quantifies their service levels and shows how they compare with competitive auctions in their region. ROA announces the top auction from each region quarterly and ad the end of the year names the auction with the highest average score from all four quarters as its national auction of the year.
For more information about ROA, visit its site here.
Manheim will be opening its third location in Ohio early next month, the auction company said Tuesday morning. Manheim Cleveland will hold its first sale on March 2 at 9:30 a.m. It is located at 4720 Brookpark Road in Cleveland.
The auction previously at this location was a former independent known as Brookpark Auction that operated for about a year-and-a-half, said a company spokesperson. Manheim rents the facilities. It began converting the facilities in December, and its lease started Feb. 1, the spokesperson said.
Manheim’s other two Buckeye State locations are Manheim Cincinnati and Manheim Ohio, which is located in Grove City.
Manheim said its new 2,000-square-foot Cleveland auction will primarily focus on independent dealers and small franchised dealers.
It will include three sales lanes, offer physical, Simulcast and online sales, and provide limited mechanical and reconditioning facilities that include Post Sale Inspection capability.
Sale day will be 9:30 a.m. on Wednesdays.
“We are opening in response to requests from local dealers for an auction that serves the Cleveland market,” said Alan Lang, vice president of Manheim Local & Mobile “This demand coincides with our market intelligence that revealed the Cleveland market is under-served, presenting exciting opportunities for Manheim and dealer clients.”
KAR Auction Services appears confident that its flow of General Motors vehicles and wholesale activity with the automaker won’t just disappear suddenly now that OEM rolled out a program that offers U.S. consumers online access to an exclusive inventory of low-mileage former company-owned, off-lease and daily rental vehicles.
Coming off a year where net income spiked 27 percent year-over-year and revenue jumped 12 percent above a year earlier, KAR chairman and chief executive officer Jim Hallett responded to an investment analyst asking how GM’s Factory Pre-Owned Collection service might impact the company’s performance this year and beyond.
“A couple of thoughts there is No.1 is that it’s very much in its infancy,” Hallett said when the company hosted its most recent quarterly conference call. “It’s just getting announced and just getting started.
“Secondly, I would say to you our job is not to try and direct the car or direct the customer to any one particular channel,” Hallett continued. “We’re going to sell cars whatever way the customer wants to get them sold. And yes, we are very much involved in the process with General Motors of facilitating these transactions, and we will be getting fees when those transactions take place.”
Wall Street observers asked Hallett again about the GM program, which went live on Feb. 9. The KAR boss reiterated that however GM or any other consignor or dealer wants to move metal through the online or in-lane channels at ADESA, the company is ready.
“I think this is an initiative by GM to get in front of the remarketing cycle and basically, post these cars on a website where the customer can go in and can view the inventory,” he said. “If a customer is able to identify a car that he or she wishes to purchase, then they connect them with the dealer and the dealer transacts the deal
“I don’t see it’s necessarily taking anything away from the physical side at ADESA. In fact, overall, I would say that we would view it as an opportunity,” Hallett went on to say.
Better inventory opportunity for independents?
In the opinion of KAR chief financial officer and executive vice president Eric Loughmiller, the best pieces of inventory independent dealers can offer are vehicles that didn’t end up in the certified pre-owned department at a franchised stores. Based on the expectation of off-lease volume continuing to grow this year, both Loughmiller and Hallett see independent dealerships having a better chance of securing more of those units.
Why? For the simple reason that there is only a set amount of franchised dealerships and the likelihood that these stores cannot absorb all of the off-lease inventory themselves.
“We know that they’ve whittled down the population of franchise dealers. It’s franchise dealers that are primarily buying these cars for CPO purposes. They’re not adding any more franchise dealers so that population is not growing,” Hallett said.
“So at some point in time when they have enough supply, these vehicles have to get released to the open market and it gives the independents an opportunity to buy those vehicles,” he added.
Double-digit volume rise at IAA
In the fourth quarter, Insurance Auto Auctions posted a 14-percent increase in revenue because its sales volume grew by 16 percent year-over-year. An investment analyst wondered if IAA could keep up that pace based on what he heard Copart say during its conference call, indicating that salvage auction company “gained a big customer win.”
Hallett defended Insurance Auto Auction’s performance, which included a Q4 gross profit rise to $88.6 million.
“First point is, I would say that the performance at IAA is primarily driven by the volume increases,” Hallett said. “And then in regards to customers, bottom line is there is wins and losses. There is always RFPs that are going to come and go, and we’re going to win some, we’re going to lose some.
“But things I would point to and ask you to focus on is, I would ask you to focus on our performance. And when you take a look at our performance year-over-year and the volume increase that we’ve demonstrated, I would think that would point to we’re winning more than we’re losing,” Hallett went on to say.
3 notes on ADESA Q4 sales performance
The company mentioned a trio of highlights associated with vehicles handled by ADESA during the fourth quarter:
— ADESA sold approximately 152,000 and 115,000 vehicles through its online-only offerings in Q4 of 2015 and 2014, respectively. Of those figures, approximately 80,000 units and 72,000 units, respectively, represented vehicle sales to grounding dealers.
— Dealer consignment vehicles represented approximately 49 percent of used vehicles sold at ADESA physical auction locations in the fourth quarter, compared with approximately 47 percent a year earlier. Vehicles sold at physical auction locations increased 6 percent year-over-year.
— The used-vehicle conversion percentage at physical auction locations, calculated as the number of vehicles sold as a percentage of the number of vehicles entered for sale at ADESA auctions, decreased to 56.1 percent in Q4, down from 56.8 percent a year earlier.
It’s funny how things play out sometimes.
When Jim Hallett attended his first National Auto Auction Association convention, he took a shuttle from the airport to the hotel. Riding on that same bus was Larry Brasher, whose father Frank Brasher started what the family has developed into a multi-auction enterprise.
A few handfuls of years and conventions gone by, Hallett is now chief executive officer and chairman of the board at KAR Auction Services, whose ADESA business unit has signed a definitive agreement to purchase all eight of the Brasher’s auction locations.
That deal, announced Wednesday afternoon, expands ADESA’s footprint in the West, giving the auction group locations in three new states, those being Idaho, Oregon and Utah.
Among other areas of KAR’s business, the move was a popular topic during KAR’s quarterly earnings call on Thursday.
During the Q&A portion of the call, Bob Labrick of CJS Securities asked about how long KAR had been speaking with Brasher’s.
“Well, I can tell you, Bob, I’ve been speaking to Brasher’s for 20 years,” Hallet said, before briefly sharing his NAAA bus ride experience and noting the longstanding relationships the company has had with independent auctions like Brasher's and the initiatives on which they've worked together.
And now, the latest step in that relationship with Brasher's should not only give ADESA an expanded Western presence, but help it make “inroads” for its buyer base and additional opportunities for other companies in the KAR family.
“We’ve been telling you for some time now that we’re focused on expanding our buyer base,” Hallett said. “And this makes great inroads to doing that for ADESA, with this acquisition. We’re also very, very focused on protecting and growing our online offerings, especially our private-label sites — which, you know, is an area that we dominate … and we expect to continue to have those private labels going forward.”
Hallett also emphasized this facilitates AFC establishing a presence in these markets, and for KAR to bring its ancillary services, as well. Like, for instance, the company’s logistics, inspection and dent removal services that it can integrate into the acquired locations.
“And as I speak of this, I haven’t even spoken to you about possible synergies that will take place once we’re fully integrated,” Hallett said.
“You can do the math. You’ve seen what the purchase price was. You’ve seen what the EBITDA on annual basis was, and calculated the multiple. We’ve believe that not only is this deal accretive, we believe it’s going to be a very attractive deal now and post-synergy, and a great addition for the ADESA business.”
Hallett said Brasher’s currently sells 190,000 vehicles per year, and that mix of dealer/commercial consignment is similar to ADESA. He also noted that “there isn’t really a major gap in either revenue per car or the number of online vehicles sold” between Brasher’s and ADESA.
In other words, it’s “nothing we don’t think we can’t bring up to our levels in a very short time period,” Hallett said.
And KAR isn’t done making acquisitions this year, Hallett said. Several opportunities are on deck and “discussions are well underway,” he said, noting that they primarily center on the whole-car business.
Later in the call, Hallett, discussing acquisitions further, said: “We’ve always maintained that there’s probably five to 10 really what I would call ‘plum’ opportunities – although we may have captured the biggest plum here.
“But there’s really five to 10 opportunities out there that if they became available and we could get these done at the multiples that we’ve maintained discipline around, then we’d be very much interested in acquiring those in the market that I’m talking about.”
On Wednesday, the same day ADESA’s agreement to purchase its eight auctions was announced, Brasher’s posted a statement to its website that explained the decision to sell its locations. Additionally, Brasher's provided some detail on the impacts going forward.
The company made the decision to sell its eight auctions “after much serious consideration and evaluation of our history, current state of the auctions, and the future of the auctions and our family,” it said.
The statement goes on to acknowledge the many questions that folks may have, not the least of which is why Brasher’s chose to sell its locations.
“We believe our auctions are the best in the industry. We have the best employees, the best customers, and the best service. We are proud of the culture of excellence that has extended three generations over 67 years,” the company said.
“In recent months, the current 10 owners of Brasher’s have been considering how to transition this business to the fourth generation,” it continued. “We were beginning to discuss the possibility of several difficult options, including the possibility of breaking up our family of auctions amongst the different family members. All of these options seemed very difficult and painful.
“During this process, we were approached by ADESA about purchasing our auctions. As discussions ensued, it became clear that this was the best way forward for our family and for the future of the auctions.”
In the statement, Brasher’s also aimed to assuage some concerns that may come up. They began by clarifying that the locations will continued to be managed by the Brasher family, and further emphasize that “massive changes” should not be expected.
“We are young, with lots of life left in us, and this business is part of us. We will continue to work side by side with you and make our auctions as great as possible,” Brasher’s said.
“Secondly, please know that we have a terrific culture and a great reputation in the industry. ADESA knows this, and they want to preserve that culture and reputation,” the statement reads. “There are not massive changes coming. We will continue to use our computer system for the foreseeable future, and continue to provide all the same services to our dealers that we do now.
“Changes will come, and we will be here to go through all of them with you. We will be here to answer all the questions we can. Please call us, email us, or come in and talk to us.”
The full letter can be found at www.brashers.com/brashers-auto-auctions-to-be-acquired-by-adesa.
After news broke Wednesday that ADESA had signed a definitive agreement to purchase all eight Brasher’s auctions, Auto Remarketing spoke with Pierre Pons, the chief executive officer of ServNet.
The Brasher’s family was among the founding members of ServNet, a network of independently owned auctions.
ADESA parent company KAR Auction Services said the purchase of the Brasher’s auctions would be a $283 million (approximately) cash deal. The transaction must meet customary conditions, including the expiration or termination of the Hart-Scott-Rodino waiting period, before it closes — KAR expects the deal to close in the first quarter.
Pons wished the Brasher’s family the best and congratulated them on the deal.
“The Brashers family has always been and will continue to be bedrocks of the auction industry. We wish them all the best with the acquisition by KAR Auction Services,” Pons said.
“We are confident that KAR and ADESA will be great stewards of the Brasher’s legacy and will, in partnership with the Brasher's family and their management, carry on the strong customer service and high level of performance that has been a hallmark of Brasher's auctions,” he continued.
“Larry Brasher and his family were founding members of ServNet nearly 28 years ago, and our respect for them is deep and unwavering. As with any change, there will be new opportunities for those involved,” Pons said. “In yesterday’s announcement, the Brasher’s auctions, KAR Auction Services and ADESA outlined some of the potential upsides, and we too envision this move creating new opportunities for ServNet.
“We remain firm believers in the important role of independent auctions in the auto remarketing industry. I, and ServNet, will continue to work diligently in representing the best interests our consignor and dealer customers, partners, members and the remarketing industry as a whole. We congratulate the Brasher’s, KAR and all involved, and are confident they will continue to be very successful," Pons concluded.
ADESA has signed a definitive agreement to purchase the Brasher family’s eight auto auctions.
ADESA parent company KAR Auction Services, which announced the agreement Wednesday afternoon, said the purchase would be a $283 million (approximately) cash deal.
The transaction must meet customary conditions, including the expiration or termination of the Hart-Scott-Rodino waiting period, before it closes.
KAR expects the deal to close in the first quarter. It plans to fund the purchase with available cash and proceeds from its revolving credit facility (more on that below).
The purchase can give ADESA a stronger foothold in the West, the company said.
Brasher’s locations include Brasher’s Salt Lake, Brasher’s Sacramento, Brasher’s Portland, Brasher’s Boise, Brasher’s San Jose, Brasher’s Northwest, Brasher’s Reno and Brasher’s Fresno.
KAR said that key corporate and local auction personnel for Brasher’s will maintain leadership roles throughout the Brasher auctions.
“The Brasher family is one of the most highly respected families in our industry. It is a tremendous honor that they have agreed to become part of ADESA,” Jim Hallett, KAR chairman of the board and chief executive officer, said in a news release.
“Brasher’s is a premier auto auction with a strong management team that shares our passion for the auction business and desire to provide the best customer service possible. I am also pleased that the members of the Brasher family and other leaders in their business have agreed to join our management team,” he said.
John Brasher, speaking on behalf of his family, added in the news release: “For 67 years, Brasher’s has been synonymous with outstanding auto auctions. We take that commitment to our employees and our customers personally, and do not approach this sale of our auctions lightly. We fully believe that our auctions will reach even greater levels of excellence as part of ADESA.”
Stephane St-Hilaire, CEO and president of ADESA, said in the release: “Brasher’s is a leader among independent auctions with a strong mix of commercial and dealer consignment customers. Along with increasing ADESA’s footprint in three new states, the addition of Brasher’s enhances ADESA’s physical and online buyer bases.
“It also increases our ancillary services, while enabling our sister company, AFC, to develop a presence at Brasher’s eight auction locations. As part of the KAR group of companies, we plan to offer Brasher’s customers the complete suite of KAR’s end-to-end vehicle remarketing services.”
KAR expands Senior Secured Revolving Credit Facility
To facilitate the purchase, KAR exercised the $300 million accordion feature of its existing $250 million Senior Secured Revolving Credit Facility. As such, this credit facility has expanded to $550 million. No other changes to the credit facility’s terms or conditions were made, the company said.
