KAR Auction Services, the giant American auction business, earlier this week announced it has acquired Canvey Island based HBC Vehicle Services, marking its first foray into a market outside of North America. HBC specializes in salvage vehicle auctions and related services.
KAR Auction Services has an annual turnover of around $2.4 billion - with a pre-tax profit of $265m. By comparison, Copart, in its last financial year had a turnover of $1.2 billion - with a pre-tax profit of £270m.
Jim Hallett, KAR CEO and Chairman said "This acquisition is the start of our expansion into new global markets, and we look forward to bringing our remarketing capabilities to the United Kingdom and beyond. We welcome the entire HBC team. Their reputation for exceptional service makes them a natural fit with our organization, and we are very pleased to have them join the KAR group of companies”.
Steve Hankins, Managing Director of HBC Vehicle Services, said
“We are and will remain dedicated to our customers. With KAR’s expertise and support, we are excited to accelerate our growth plans and continue to deliver competitive services to the salvage auction industry across the United Kingdom. We look forward to finding new ways to deliver the best products and services to all of our customers.”
HBC - BACKGROUND
HBC was formed over 50 years ago as Holding and Barnes. It is the UK's 3rd largest salvage operator with a turnover of £28.6m for the year to 31 March 2014, operating from 10 sites, and a pre-tax profit of £1.52m. Copart is largest with £126m UK turnover, Motorhog is 2nd.
In June 2013 a management buy-out bought the company from Hadsley Ltd Guernsey, owned by the trustees of the Holding Family Settlement.
The 4 directors of HBC, who each own 25% of the new company are:
- Steve Hankins, Managing Director. He qualified as a motor vehicle technician. Before HBC he was with Budget for 16 years as Engineering Manager and then Associate Director for supplier management and with their ACM ULR division as Associate Director with responsibility for vehicle repair and total loss.
- Matt Bache, Finance Director
- Jim Chatten, Commercial Director
- Geoff Riebold, IT Director
KAR AUCTION SERVICES - BACKGROUND
KAR Auction Services is a FORTUNE® 1000 company and operates vehicle auction services for sellers and buyers worldwide. It has around 13,000 employees and a turnover of $2.5 billion last year.The KAR group of companies is comprised of 3 key business unit:
1 - IAA Salvage Services (Insurance Auto Auctions)
IAA is a salvage auto auction company with a network of 169 auction sites serving the total-loss needs of insurance companies, fleet, lease and rental companies in North America. IAA has an annual turnover of around $950m - about 38% of KAR's total business. Around 40% of ADESA's total vehicle sales volumes are done on-line.
2 - ADESA Auction Services
ADESA has a network of 66 wholesale used vehicle (whole car) auction sites. They are the 2nd largest used vehicle auction network in North America. ADESA has an annual turnover of around $1.3 billion - 52% of KAR's total business. Over 50% of ADESA's total vehicle sales volumes are done on-line.
3 - AFC (Automotive Finance Corporation)
AFC provides inventory financing and comprehensive business services primarily to independent used vehicle dealers. AFC has an annual turnover of around $250m - about 10% of KAR's total business.
Information source: ABP Club