CARMEL, Ind. ,
May 26, 2020 /PRNewswire/ -- KAR
Auction Services, Inc. d/b/a KAR Global (NYSE: KAR), a global
vehicle remarketing and technology solutions provider, today
announced the placement of $550
million in newly issued perpetual convertible preferred
stock of KAR Global ("KAR"). The preferred stock has a 7.0%
dividend which shall be paid in-kind for the eight quarters
following closing, and thereafter in cash or in-kind at KAR's
option. The initial conversion price of $17.75 per share represents an approximately 42%
premium to KAR's closing price of $12.52 per share on Friday, May 22, 2020. The investment was led by
funds advised by Apax Partners (the "Apax Funds"), a global private
equity advisory firm, with participation by Periphas Capital, L.P.
The proceeds of the transaction will be utilized to expedite the
resumption of operations to meet market demand, sustain the
company's technology platforms and development pipeline and
navigate the industry and economic recovery.
"KAR took early and decisive steps in response to COVID-19 to
protect the safety of our employees and customers, preserve our
capital position and keep our operations moving forward," said
Jim Hallett, Chairman and CEO of
KAR. "This transaction will help us continue to support our global
customers and further accelerate our digital transformation. Apax
is the right strategic partner for our company, employees and
stockholders, and their investment reinforces the strength of our
brands, market position and long-term strategy for growth and
"KAR is an internationally recognized leader in wholesale
remarketing with a strong track record of innovation," said
Roy Mackenzie, Partner at Apax
Partners. "The company's market leading digital platforms and
investments in data analytics uniquely position them to thrive in
the new digital normal. We look forward to partnering with KAR's
progressive and entrepreneurial management team to transform their
industry and drive long-term value for all stockholders."
Goldman Sachs & Co. LLC acted as lead financial advisor,
J.P. Morgan Securities LLC acted as financial advisor and Skadden,
Arps, Slate, Meagher & Flom LLP served as legal advisor to KAR.
Simpson Thacher & Bartlett LLP served as legal advisor to Apax
Partners. Wachtell, Lipton, Rosen & Katz served as legal
advisor to Periphas Capital.
KAR Auction Services, Inc. d/b/a KAR Global (NYSE: KAR),
provides sellers and buyers across the global wholesale used
vehicle industry with innovative, technology-driven remarketing
solutions. KAR Global's unique end-to-end platform supports whole
car, financing, logistics and other ancillary and related services,
including the sale of nearly 3.8 million units valued at
approximately $40 billion through our
auctions in 2019. Our integrated physical, online and mobile
marketplaces reduce risk, improve transparency and streamline
transactions for customers in more than 80 countries. Headquartered
in Carmel, Indiana, KAR Global has
employees across the United
Mexico, U.K. and Europe. For more information, go to
www.karglobal.com. For the latest KAR Global news, follow us on
About Apax Partners
Apax Partners is a leading global private equity advisory firm.
Over its more than 40-year history, Apax Partners has raised and
advised funds with aggregate commitments of c.$50 billion. The Apax Funds invest in companies
across four global sectors of Tech & Telco, Services,
Healthcare and Consumer. These funds provide long-term equity
financing to build and strengthen world-class companies.
The Apax Funds are growth focused investors with a long and
successful track record investing in leading software and digital
businesses. The Apax Funds have invested more than $5 billion in this sub-sector, including
Dealer.com, DealerTrack, Trader Corporation and Auto Trader Group
For more information see: www.apax.com.
About Periphas Capital
Periphas Capital focuses on growth and buyout investments in
four primary industries: Technology Enabled Services, Business
Services, Consumer and Industrials. The principals of Periphas
bring 30 years of private equity investing experience and have led
37 investments with aggregate invested capital of $5 billion, including a previous investment in
KAR, in addition to investments in Aramark, Burger King and
For more information see: www.periphascapital.com.
This press release includes certain statements that may be
deemed to be "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and are intended
to be covered by the safe harbor provisions thereof. All
statements, other than statements of historical facts, included in
this press release that address activities, events or developments
that we expect, believe or anticipate will or may occur in the
future, are forward-looking statements. Forward-looking statements
are not guarantees of future performance and we caution you not to
place undue reliance on such statements. Forward-looking statements
are generally identifiable by the use of the words "may," "will,"
"should," "expect," "anticipate," "estimate," "believe," "intend,"
"project," "continue," or the negative of these words, or other
similar words or terms.
Forward-looking statements contained in this press release are
subject to a number of risks and uncertainties, many of which are
beyond our control, that may cause our actual results, performance
or achievements to be materially different from future results,
performance or achievements expressed or implied by forward-looking
statements made by us. Factors and risks to our business that could
cause actual results to differ from those contained in the
forward-looking statements are described in our filings with the
Securities and Exchange Commission. These risks and uncertainties
include, but are not limited to, potential risks and uncertainties
relating to the novel coronavirus (COVID-19).
View original content to download
SOURCE KAR Auction Services, Inc.