For the second time this month, KAR Auction Services has announced plans for a major purchase. And this time, it’s an international move that gives KAR an “anchor” in Continental Europe’s wholesale market and beyond.
KAR said Wednesday morning it has reached a definitive agreement to buy CarsOnTheWeb, a digital wholesale auction platform out of Belgium, for roughly 91 million euros in cash, plus as much as 65 million euros more that would be staggered over a specific time frame.
The latter figure would be contingent on certain terms and conditions as well as performance by COTW. Pending regulatory approvals, the potential transaction is expected to close in the first quarter of 2019.
“CarsOnTheWeb is a leading cross-border automotive remarketing platform in Continental Europe, and their addition to our family of companies will instantly anchor KAR in the international marketplace,” KAR chairman and chief executive Jim Hallett said in a news release.
“CarsOnTheWeb’s proven, profitable operating model will bring innovative technology, experienced leadership and an active European customer base to our organization. Upon closing, these highly complementary assets and capabilities will help fuel KAR’s continued growth and allow us to deliver more globally integrated solutions to our customers,” Hallett said.
KAR currently has operating locations in the U.S., U.K., Canada and Mexico, with 120 countries in its customer base.
The operations and capabilities of COTW, as described by KAR, are quite comprehensive, as well. It serves the wholesale markets in Continental Europe and has sales operations in Belgium, France, Germany, Italy, the Netherlands and Spain.
COTW connects automakers, fleet owners, wholesalers and dealers, providing various auction, transport and related services to sellers in the six aforementioned nations and buyers in more than 50 countries.
Its online and mobile tools are available in 19 languages. COTW’s offerings include real-time search, bid, payment and logistics scheduling tools, plus payment, document transfer and post-sale processes VAT-compliant. Those services, KAR said, support 97 percent of cross-border related customer transactions.
And that can be a somewhat tricky proposition to navigate in Europe.
“Cross-border transactions are particularly complex for European remarketers,” said Benjamin Skuy, KAR’s executive vice president for international markets and strategic initiatives, in the news release.
“CarsOnTheWeb’s unique platform and logistics solutions directly address these challenges and have the power to deliver seamless, convenient and connected services on a global scale,” Skuy said. “By leveraging KAR’s broad portfolio of technology, strong industry relationships and existing ADESA UK operations, we can enhance these offerings and develop new opportunities to serve wholesale customers.”
COTW has 170 employees as well as seven offices in six different countries. Its online auction types include what it describes as: dynamic auctions, target auctions, buy-now auctions, blind auctions and “x-Time” auctions.
KAR plans on keeping COTW’s current operating locations, employees and key leadership/management upon closing of the deal.
Among those key leaders is Johan Meyssen, COTW’s chief executive.
“KAR and their affiliated brands are some of the most recognized and respected names in our industry,” said Meyssen, who will report to Skuy. “We look forward to obtaining the necessary regulatory approvals and leveraging the expertise and talents of both companies to drive growth and better serve our customers.”
Earlier this month, KAR announced the purchase of Clearplan, a Reno, Nev.-based digital platform for recovery agents, drivers, forwarders and lenders that acts as a centralized, mobile “cloud-based hub” for repo workflow and logistics management.
Updated to included KAR's U.K. presence.