Carmel-based KAR Auction Services Inc. denies that a decision has been made on the headquarters location for the auto-salvage business it plans to spin off into a separate publicly traded company.
A KAR spokeswoman told IBJ on Wednesday morning that the business, Insurance Auto Auctions, was “staying” in Westchester, Illinois, a Chicago suburb that has been its home since the 1990s.
However, the spokeswoman later said in an email, “If I said that, I meant for now. The details of the spinoff have not been determined.”
KAR executives did not address the location during a conference call with investors Wednesday other than to say additional details about the plans will be disclosed later this year.
KAR announced plans for the spin-off Tuesday.
The separation is designed to “increase shareholder value and focus each company’s strategic priorities on its respective marketplace and unique customers,” the company said in a written statement.
Under the proposal, stockholders in KAR would retain shares in the remaining KAR Auction Services business and receive new shares of Insurance Auto Auctions, or IAA. Those shares are expected to trade on the New York Stock Exchange.
Details of the stock distribution are expected to be filed later this year, KAR said.
IAA accounted for 34 percent of KAR's revenue of $3.5 billion in 2017.
After the separation, KAR would focus primarily on its whole car auction marketplaces and technology side of the business. IAA would focus on the salvage vehicle marketplace, serving insurers and buyers including dealers, recyclers and metal-scrapping companies.
Jim Hallett will remain CEO and board chairman for KAR. John Kett, IAA’s president and CEO, will continue to lead IAA.
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