Boston, MA – Parthenon Capital, a leading middle-market private equity firm, announced today that it has partnered with Kelso & Company, GS Capital Partners and ValueAct Capital in the acquisition of ADESA, Inc. (“ADESA”), a leading provider of whole car vehicle auctions, salvage vehicle auctions and used vehicle dealer financing, in a going private transaction. As part of the transaction, Insurance Auto Auctions, Inc. (“IAAI”), a leading provider of automotive salvage auction and claims processing services, was contributed to the surviving corporation. Prior to the transaction, IAAI was owned by Parthenon Capital, Kelso & Company and certain members of its senior management. Under the merger agreement, each outstanding share of ADESA common stock was converted into the right to receive $27.85 per share in cash. The total transaction value, including the contribution of IAAI, the assumption of approximately $700 million of debt and the payment of related fees and expenses, is approximately $3.7 billion.
The combined company, which will be named ADESA, will be led by Chief Executive Officer Brian Clingen. Tom O’Brien, the former CEO of IAAI, will run the combined salvage division. Jim Hallet, who was CEO of ADESA until 2003, will return to the company to run the whole car division. The combined company will be a dominant provider in all facets of the auto auction industry, including whole car, salvage, dealer finance and related services.
David Ament, a Partner at Parthenon Capital who is involved in the firm’s business services investments, commented, “We are very pleased to join Kelso & Company, GS Capital Partners and ValueAct in this transaction. The combination of ADESA and IAAI will create a best in class organization in an attractive segment of the business services industry. We have had a great experience working with IAAI and look forward to a deeper involvement in the auto auction sector.”
About ADESA, Inc.
Headquartered in Carmel, Indiana, ADESA, Inc. is a leading provider of whole car and salvage vehicle auctions and used vehicle dealer financing. ADESA’s operations span North America with 54 ADESA used vehicle auction sites, 42 Impact salvage vehicle auction sites and 85 AFC loan production offices. For further information on ADESA visit the company’s Web site at www.adesainc.com.
About Insurance Auto Auctions, Inc.
Insurance Auto Auctions, Inc., founded in 1982, a leader in automotive total loss and specialty salvage services in the United States, provides insurance companies with cost-effective, turn-key solutions to process and sell total-loss and recovered-theft vehicles. The company currently has 95 sites across the United States. Additional information about Insurance Auto Auctions, Inc. is available at www.iaai.com.
About Parthenon Capital
Parthenon Capital is a leading mid-market private equity firm based in Boston and San Francisco. Parthenon utilizes niche industry expertise and a deep execution team to invest in growth companies in service industries. Parthenon seeks to be an active and aligned partner to management, either through recapitalization transactions or by backing new executives. Parthenon has particular expertise in business services, financial and insurance services and healthcare, but seeks any service, technology or delivery business with a strong value proposition and proprietary know-how. Parthenon’s 25 person investment team has deep experience in corporate strategy, capital markets and operations, enabling the firm to pursue complex, multi-faceted value creation opportunities. For more information, visit www.parthenoncapital.com .