Adesa parent takes first step to becoming public company

Back to TopCommentsE-mailPrintBookmark and Share

KAR Holdings Inc., parent of the Carmel-based auto-auction firm Adesa Inc., has announced its intentions to become a publicly traded company.

KAR filed its registration statement for the initial public offering yesterday with the Securities and Exchange Commission and intends to list its stock on the New York Stock Exchange.

The number of shares to be offered and the price range for the IPO have not been determined, the company said.

Adesa had been a public company until a group of private investors acquired it in December 2006 for $3.7 billion and took it private. The buyers were Kelso & Co.; GS Capital Partners, an affiliate of Goldman Sachs; ValueAct Capital and Parthenon Capital.

It’s not unusual for private investors to take a company public again in an effort to get a return on their investment, said David Millard, chairman of the business department at Indianapolis-based law firm Barnes & Thornburg LLP.

“Your only chance of liquidity is a sale or a public offering,” he said. “As you go into the IPO process, you’re constantly weighing that.” New York-based Goldman Sachs & Co. is serving as the underwriter of KAR’s proposed IPO. Its timing depends upon several factors, including market conditions, the company said.

Calls to Adesa seeking comment on the proposed IPO were not returned this morning.

The market swoon that started last year already has prompted two area companies to put their aspirations of going public on hold.

ExactTarget had laid out plans in December 2007 for an $86 million offering to grow its e-mail marketing software business. Market conditions soured in 2008, leaving the offering in limbo. About the same time, Aprimo Inc., a maker of marketing software, unveiled plans for a $50 million IPO. It also pulled the offering last year because of poor market conditions and instead raised $15 million in a private offering.

If Adesa goes through with its IPO, it would be the first Indianapolis-area company to go public since HHGregg Inc. in 2007. Although signs of a market thaw are beginning to emerge, 2009 still has been a pretty anemic year for the U.S. IPO market. As of August, the value of U.S.-listed IPOs stood at about $5 billion—a far cry from the $30 billion of initial public offerings sold last year, according to New York-based data tracker Dealogic.

But the one bit of positive news has been the market for technology IPOs. Through August, nine technology companies have raised a combined $1.8 billion through initial public offerings—a 133-percent increase from last year, according to Dealogic.

Millard at Barnes & Thornburg agreed there are signs that the IPO market may be on the upswing.

“Very clearly the IPO window is either open or opening,” he said. “So I think we’re going to see a rash of IPOs, because there were a lot of companies that were preparing to go public before the market crashed.”

Adesa was founded in 1989 to auction trade-ins from car dealers and went public three years later. It was bought in 1995 by Minnesota Power & Light, which spun Adesa off into its own publicly traded company in 2004. Investors took the company private two years later.

Meanwhile, Adesa President James Hallett was fired in 2005 but returned as CEO of auction operations in 2007. Adesa’s 62 used-vehicle auction sites transport and recondition cars and handle the paperwork. Its 87 Automotive Finance Corp. outlets finance dealer purchases at auction. Its 152 Insurance Auto Auctions sites auction salvaged cars—typically wrecks that are purchased for their parts.

The operations employ 13,000 in North America, including more than 300 at the Carmel headquarters.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

  3. It's empowering for this niche community to know that they have an advocate on their side in case things go awry. http://www.youtube.com/watch?v=Lrst9VXVKfE

  4. Apparently the settlement over Angie's List "bundling" charges hasn't stopped the practice! My membership is up for renewal, and I'm on my third email trying to get a "basic" membership rather than the "bundled" version they're trying to charge me for. Frustrating!!

  5. Well....as a vendor to both of these builders I guess I have the right to comment. Davis closed his doors with integrity.He paid me every penny he owed me. Estridge,STILL owes me thousands and thousands of dollars. The last few years of my life have been spent working 2 jobs, paying off the suppliers I used to work on Estridge jobs and just struggling to survive. Shame on you Paul...and shame on you IBJ! Maybe you should have contacted the hundreds of vendors that Paul stiffed. I'm sure your "rises from the ashes" spin on reporting would have contained true stories of real people who have struggled to find work and pay of their debts (something that Paul didn't even attempt to do).