Recently, Carvana further secured its position as the industry pioneer for buying and selling cars online, with the signing of a definitive new agreement to acquire ADESA’s U.S. physical auction business. The announcement was made during the company’s recent Q4 2021 Earnings report, wherein Carvana delivered a number of additionally exciting data points that reflect another incredible year of growth, improvement, and ever-increasing demand for a better way to buy and sell used cars.
ADESA, previously a subsidiary of KAR Global, is the second-largest provider of wholesale vehicle auction solutions in the United States with 56 sites across the country and more than 4,500 corporate and operations team members. In 2021, the ADESA U.S. business facilitated more than one million transactions through those sites, lighting the path forward to become the largest, and most profitable auto retailer in the country. With the new deal, Carvana Country just got a lot bigger—to the tune of nearly 6.5 million square feet of buildings on more than 4,000 acres. At the core of this exciting new announcement is something really remarkable. Now, with ADESA U.S.’s help, 78% of the U.S. population lives within 100 miles of either an ADESA U.S. or existing Carvana inspection and reconditioning center, which ultimately means customers will have access to more vehicles with faster delivery times than ever before, unlocking straightforward access to car ownership and great customer experiences for even more people across the country.
The deal reflects a wealth of highly synergetic complements between Carvana and ADESA U.S.’s business, with both brands’ collective reaches now coming together to extend Carvana’s nationwide logistics and reconditioning network. Adding ADESA U.S.’s already considerable footprint to Carvana’s continually growing network adds the ability to contribute approximately 2 million incremental units to Carvana’s annual production, once at full utilization. Carvana will continue to operate ADESA U.S.’s existing wholesale auction business and related services under the ADESA brand. The ADESA U.S. business generated more than $800 million of revenue and over $100 million of EBITDA in 2021. Additionally, Carvana’s leadership team is growing as a result of the new acquisition. ADESA U.S. President John Hammer will play a critical role in the process, and will be joining Carvana’s team as the transition is finalized.
In a recent press statement, Ernie Garcia, Founder and CEO of Carvana expressed his excitement, saying, “We are thrilled to welcome ADESA U.S. to the Carvana family. Together with Carvana’s existing operations, ADESA U.S.’s nationwide infrastructure network and robust, highly profitable business will accelerate Carvana’s progress toward becoming the largest and most profitable automotive retailer,” said Ernie. “Over time, we will leverage our combined infrastructure and complementary expertise to deliver even better selection, better value, and faster delivery times to our retail customers while simultaneously raising the bar and providing more access and better experiences to our wholesale customers.”
Moreover, the announcement was an exciting moment for the broader auto industry, as two formidable brand names announced a major move to bring a better car buying and selling experience to more people, with Reuters noting that, “about half of U.S. consumers are preferring used vehicles as the global semiconductor shortage and other supply chain issues make new vehicles more expensive and harder to get.” During a recent interview with Forbes, Ernie took a moment to look back down memory lane. “It took us almost a year to sell our first 100 cars,” said Ernie. “It took us three years to sell 10,000; six years to sell 100,000. Coming up on nine years, we’ve sold 1 million.” In nine more, there’s no telling how much further ahead we’ll be, but the journey there just got a lot brighter with ADESA U.S.’s addition to Carvana Country.
