KAR Auction Services Acquires Transport Division of Dependable Auto Shippers
KAR Auction Services, a holding company for used vehicle auctioneer ADESA, Automotive Finance Corp. and Insurance Auto Auctions, a firm that resells total-loss vehicles, has purchased the vehicle transportation business of Dependable Auto Shippers, a company based in Mesquite, Texas, that filed for Chapter 11 bankruptcy in December.
Terms of the transaction were not disclosed and it’s not clear whether the deal includes the purchase of any vehicle-hauling equipment.
A subsidiary of KAR Auction Services, called CarsArrive Network, which operates an online marketplace for shippers and carriers, is making the acquisition as a way to provide service directly to consumers, according to a May 17 statement.
The company arranges for delivery of vehicles to private homes on behalf of selling dealers using a network of more than 4,500 carriers and 30,000 trucks.
“CarsArrive has developed a leading portfolio of products and services that help dealers, wholesalers, fleet managers and other commercial customers ship their vehicles safely and efficiently,” said Michael Briggs, CEO of CarsArrive and Recovery Database Network Inc. “If there’s a vehicle to be moved in any channel for any customer, CarsArrive wants to be there to move it.”
And because more consumers are purchasing vehicles online, Briggs added, demand for vehicle transportation and related logistics services is growing.
The KAR group of companies operate auction sites in the United States, Canada, Mexico and the United Kingdom and has customers in 110 countries. ADESA sold 2.9 million vehicles at 77 auction sites and online, generating about 56% of KAR Auction Services’ total revenue of $3.15 billion in 2016.
In addition, Insurance Auto Auctions sold 2.2 million vehicles through a network of 173 auction sites and online in 2016 and last week the company announced the expansion of facilities in Savannah and Tifton, Ga., to handle additional customer needs and potential volume from hurricanes and other natural disasters along the Atlantic seaboard and Florida Panhandle regions.
Automotive Finance Corp. provides inventory financing and business services to independent used-vehicle dealers through 123 offices.
KAR Auction Services is headquartered in Carmel, Ind., and its stock is traded on the New York Stock Exchange.
Dependable Auto Shippers, founded in 1954, filed for reorganization in U.S. Bankruptcy Court in Dallas on Dec. 21, 2016 and listed assets and liabilities of between $10 million and $50 million. The Wall Street Journal reported that the company could not repay debt after buying 25 car-hauling rigs in 2015 and that an accounting error had disguised problems with cash flow, leading to the Chapter 11 filing.
In November 2015, DAS reported that it had a fleet of 44 tractors, 46 trailers and 19 straight trucks based on information on file with the U.S. Department of Transportation.
