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KAR AUCTION SERVICES, INC.

(KAR)
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KAR AUCTION SERVICES, INC. : Entry into a Material Definitive Agreement, Other Events, Financial Statements and Exhibits (form 8-K)

08/23/2021 | 07:12am EDT

Item 1.01 Entry Into a Material Definitive Agreement.

On August 20, 2021, ADESA, Inc. ("ADESA"), a subsidiary of KAR Auction Services, Inc., a Delaware corporation (the "Company"), entered into a Securities Purchase Agreement (the "Purchase Agreement"), by and among (i) ADESA, (ii) Carwave Holdings LLC ("Carwave"), (iii) KKR Chevy Blocker, LLC ("SMA Blocker") and KKR NGT II (Chevy) Blocker L.P. ("NGT2 Blocker" and, together with the SMA Blocker, the "Blockers"), (iv) KKR Chevy Aggregator L.P. (the "Aggregator"), John Lauer, William Lauer, Joseph Lauer, Lauer Holdings Inc., KKR-Milton Strategic Partners L.P., KKR DAF Private Assets Fund Designated Activity Company and KKR NGT II (Chevy) Blocker Parent L.P. (collectively, the "Sellers") and (v) the Aggregator, in its capacity as seller representative. Pursuant to the terms and conditions of the Purchase Agreement, ADESA will purchase from the Sellers all of the equity interests of Carwave and the Blockers (the "Transaction").

The aggregate cash consideration payable by ADESA in connection with the Transaction is $450 million, subject to certain adjustments pursuant to the Purchase Agreement. The Transaction and the Purchase Agreement have been unanimously approved by the Board of Directors of the Company.

Consummation of the Transaction is subject to customary conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Under certain circumstances, upon the termination of the Purchase Agreement relating to the failure of ADESA to perform certain covenants, ADESA would be required to pay a termination fee of $22.5 million to the Sellers on the terms and conditions further set forth in the Purchase Agreement.

The Purchase Agreement also contains customary representations and warranties and covenants, including, among other things, covenants with respect to the operation of the business of Carwave and its subsidiaries between the signing of the Purchase Agreement and the closing of the Transaction. In connection with the entry into of the Purchase Agreement, ADESA has obtained a customary representations and warranties insurance policy as recourse for certain losses arising out of breaches of the representations and warranties of the Sellers, the Blockers and Carwave and its subsidiaries in the Purchase Agreement.

The foregoing description of the Transaction does not purport to be complete and is qualified in its entirety by reference to the complete text of the Purchase Agreement, a copy of which is attached hereto as Exhibit 2.1 and incorporated herein by reference.



Item 8.01. Other Events.



On August 23, 2021, the Company issued a press release (the "Press Release") announcing the execution of the Purchase Agreement. A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.



Forward-Looking Statements


Certain statements contained in this report include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and which are subject to certain risks, trends and uncertainties. In particular, statements made that are not historical facts may be forward-looking statements. Words such as "should," "may," "will," "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," and similar expressions identify forward-looking statements. Such statements are based on management's current expectations, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include those uncertainties regarding the impact of the COVID-19 virus on our business and the economy generally, and those other matters disclosed in the Company's Securities and Exchange Commission filings. The Company does not undertake any obligation to update any forward-looking statements.

Item 9.01 Financial Statements and Exhibits.



(d) Exhibits


EXHIBIT NO. DESCRIPTION OF EXHIBIT

2.1 Securities Purchase Agreement, by and among ADESA, Inc., Carwave

            Holdings LLC, KKR Chevy Aggregator L.P., John Lauer, William Lauer,
            Joseph Lauer, Lauer Holdings Inc., KKR Chevy Blocker, LLC, KKR-Milton
            Strategic Partners L.P., KKR DAF Private Assets Fund Designated
            Activity Company, KKR NGT II (Chevy) Blocker L.P. and KKR NGT II
            (Chevy) Blocker Parent L.P.*

99.1 Press Release dated August 23, 2021.

104 Cover Page Interactive Data File - the cover page XBRL tags are

            embedded within the Inline XBRL document.



* Certain exhibits and schedules to the Securities Purchase Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to provide to the Securities and Exchange Commission copies of such documents upon request; provided, however, that the Company reserves the right to request confidential treatment for portions of any such documents.

© Edgar Online, source Glimpses

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Sales 2021 2 170 M - -
Net income 2021 59,7 M - -
Net Debt 2021 1 724 M - -
P/E ratio 2021 61,1x
Yield 2021 -
Capitalization 1 805 M 1 805 M -
EV / Sales 2021 1,63x
EV / Sales 2022 1,55x
Nbr of Employees 9 400
Free-Float 98,6%
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Number of Analysts 10
Last Close Price 14,90 $
Average target price 19,50 $
Spread / Average Target 30,9%
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Managers and Directors
Peter J. Kelly Chief Executive Officer & Director
Eric Michael Loughmiller Executive VP, Chief Financial & Accounting Officer
James P. Hallett Executive Chairman
Michael T. Kestner Lead Independent Director
J. Mark Howell Independent Director
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