KAR Auction Services, Inc. has signed a definitive agreement to acquire BacklotCars Inc., subject to certain regulatory approvals and other customary closing conditions. BacklotCars is an app and web-based dealer-to-dealer wholesale platform featuring a 24/7 "bid-ask" marketplace and comprehensive vehicle inspections performed by automobile mechanics.
Upon closing, the acquisition will further diversify KAR's broad portfolio of digital capabilities and accelerate the company's strategy to be a leading digital dealer-to-dealer marketplace provider. The acquisition will also build on the successful foundation of the company's TradeRev auction platform and provide dealers with greater choice, enhanced transparency, and access to an expanded buyer and seller population.
"KAR has led the digital transformation of the remarketing industry for over a decade, and we're 100% committed to providing dealers with the best, most advanced platforms to sell and source inventory," said Jim Hallett, Chairman and CEO of KAR. "BacklotCars has grown rapidly in the highly competitive dealer-to-dealer space and is the perfect complement to our current capabilities and footprint. I'm confident the addition of Backlot's leadership, technology, and exceptional customer-service model will quickly benefit our combined customers, enhance KAR's competitive position and accelerate growth for both organizations."
BacklotCars was founded in 2015 in Kansas City and currently serves dealers in 46 states across the United States. The company's technology platform and marketplace were specifically designed to address dealer pain points associated with digital transactions such as certified inspections and integrated transportation and dealer financing options.
The platform allows buyers the flexibility to engage when and where they want, and provides full transparency between buyers, sellers and bidders. BacklotCars' artificial intelligence and machine learning capabilities further simplify the buying experience by delivering personalized vehicle recommendations to each individual buying dealer.
After the transaction closes, key BacklotCars leadership including co-founders Justin Davis, Ryan Davis, Josh Parsons and Fabricio Solanes will remain with the company, and KAR intends to continue operating BacklotCars' Kansas City headquarters location.
"We're excited to expose Backlot sellers' inventory to KAR's active buyer base while expanding buyer access to quality wholesale inventory beyond their respective local markets. We look forward to completing the transaction and leveraging the power of our combined technology solutions and industry expertise to help our companies and our customers succeed," said Justin Davis, co-founder and CEO of BacklotCars.
The purchase price of the acquisition is $425 million and the transaction is expected to close prior to year-end pending the requisite legal and regulatory approvals. Guggenheim Securities, LLC is acting as exclusive financial advisor to KAR Global and Winston & Strawn LLP is serving as legal advisor. Evercore is acting as exclusive financial advisor to BacklotCars and Stinson LLP is serving as legal advisor.
KAR Auction Services, Inc., provides sellers and buyers across the global wholesale used vehicle industry with innovative, technology-driven remarketing solutions. KAR Global's unique end-to-end platform supports whole car, financing, logistics and other ancillary and related services, including the sale of nearly 3.8 million units valued at approximately $40 billion through our auctions in 2019. Our integrated physical, online and mobile marketplaces reduce risk, improve transparency and streamline transactions for customers in more than 80 countries. Headquartered in Carmel, Indiana, KAR Global has employees across the United States, Canada, Mexico, U.K. and Europe. For more information and the latest KAR Global news, go to www.karglobal.com.
Based in Kansas City, MO, BacklotCars is a leading online marketplace for auto dealers. Through BacklotCars, auto dealers, auto finance, and rental car companies can transact without having to go to physical auctions. The company's end to end solution is truly seamless for dealers as BacklotCars provides vehicle inspections, transportation, and inventory finance services.