CARMEL, Ind. –
KAR Global has reached a deal to purchase BacklotCars, an online dealer-to-dealer wholesale platform, for $425 million.
KAR announced the definitive agreement Tuesday morning, and the purchase is subject to certain regulatory approvals and other customary closing conditions.
Assuming those conditions are met, KAR expects the deal to close by the end of the year. Once it does, BacklotCars’ core leadership, including its four co-founders, will continue on with the company. KAR also plans to keep the company’s headquarters in Kansas City, where it was founded in 2015.
This deal augments what is already a bounty of digital marketplaces at KAR, which has purchased such entitites as TradeRev, DRIVIN and CarsOnTheWeb in recent years, and acquired OPENLANE about a decade ago.
In the news release, KAR chairman and chief executive Jim Hallett said: “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.
“BacklotCars has grown rapidly in the highly competitive dealer-to-dealer space and is the perfect complement to our current capabilities and footprint,” Hallett said. “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 offers a 24-7 “bid-ask” marketplace along with vehicle inspections and is used by dealers in 46 states. It aims to “address dealer pain points associated with digital transactions,” like inspections, transportation and dealer financing, according to a KAR news release.
KAR said once the deal closes, BacklotCars “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” and “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.”
Justin Davis is the CEO of BacklotCars and one of its co-founders. In the release, he said: “KAR Global is the most innovative and progressive digital remarketing company in the world, and their entrepreneurial roots and culture are a great match for BacklotCars.
“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,” he said. “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.”