KAR Auction Services, Inc. (KAR) stock soared 69.47% in the after-market trading session at the price of $23.20 after it signed a $2.2B deal to sell its ADESA U.S. physical auction business to Carvana.
KAR supplies buyers and sellers of the wholesale automobile industry with technology-driven, ingenious remarketing solutions. The company’s exceptional end-to-end forum provides whole car logistics, financing, and related services.
KAR $2.2B Business Deal with Carvana
On 24th February 2022, KAR entered a definitive deal with Carvana to sell its ADESA US physical auction business. The all-cash dealing is worth $2.2B and contains all auction operations, sales, and staff at 56 ADESA US vehicle logistics centers. The contract is closely linked with KAR’s digital strategy and will support the company to concentrate on its digital business. The gross proceeds from the transaction will minimize KAR’s business debt.
As per the deal, KAR will act as Carvana’s technology partner, facilitating the Simulcast+, Simulcast technology, and the ADESA.com digital marketplace. Roughly 4,500 KAR and ADESA workers will transition to Carvana at the closure of the dealing. The transaction is subject to the customary closing conditions and will close by the Q2 of 2022. Both KAR and Carvana’s boards of directors had approved the transaction.
KAR Q4 2021 Financial Results
Earlier on 16th February 2022, KAR published its financial results for the Q4 ended 31st December 2021. KAR reported revenue of US$549.4M for the Q4 of 2021. It represents a gain of 4% from US$529.6M for the Q4 of 2020. Net income was US$5.1M and a loss per share (diluted) of US$(0.04) for the Q4 of 2021. The company has a net loss of US$17.1M, or per share of US$(0.21), for the Q4 of 2020. Operating adjusted net income per share (diluted) was US$0.11 for the quarter ended 31st December 2021.
KAR Year 2021 Earnings Report
For the year ended 31st December 2021, revenue totaled US$2,251.6M. It represents a 3% growth from US$2,187.7M for the year 2020. Net income was US$66.5M, or per diluted share of US$0.16, for the year 2021. The company has a net income of US$0.5M and a loss per share of US$(0.16) for the year 2020.