8-K/AMaterial AgreementsRegulation FDExhibits & Filings

CARVANA CO. 8-K/A Report, Material Agreement (Feb 25, 2022)

Filed February 25, 2022For Securities:CVNA

Summary

Carvana Co. (CVNA) announced a significant strategic move through a definitive agreement to acquire the U.S. physical auction business of ADESA, Inc. from KAR Auction Services, Inc. for approximately $2.2 billion. This acquisition, expected to close in the second quarter of 2022, is a substantial expansion for Carvana, aiming to integrate a key part of the wholesale automotive infrastructure into its operations. The company has secured committed debt financing of $3.275 billion to fund the purchase price, associated costs, and future working capital needs, indicating a non-contingent financing structure. This transaction represents Carvana's commitment to accelerating its growth and strengthening its market position within the automotive retail and wholesale sectors, by gaining access to established physical auction facilities.

Key Highlights

  • 1Carvana to acquire ADESA's U.S. physical auction business for $2.2 billion.
  • 2Acquisition is expected to close in the second quarter of 2022.
  • 3Financing for the acquisition is fully committed at $3.275 billion in debt facilities.
  • 4Debt financing will cover purchase price, expenses, and provide for working capital needs.
  • 5The acquisition is not subject to financing contingency.
  • 6Transaction has received board approval from both companies.
  • 7This move integrates a significant portion of the wholesale automotive infrastructure into Carvana's business model.

Frequently Asked Questions

The acquisition of ADESA's U.S. physical auction business is intended to significantly expand Carvana's operational footprint and integrate a key part of the wholesale automotive infrastructure into its business model. This will allow Carvana to gain access to established physical auction facilities and potentially enhance its sourcing and remarketing capabilities.

Carvana has secured committed debt financing totaling $3.275 billion through Acquisition Finance Facilities. This financing will cover the $2.2 billion purchase price, associated costs, and provide for certain working capital needs and general corporate purposes, including facility improvements.

No, Carvana's obligation to fund the purchase price is not subject to a financing contingency or condition, as the necessary debt financing has already been committed.

The acquisition is expected to close during the second quarter of 2022, subject to the satisfaction or waiver of customary closing conditions.