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.