ADESA's strategy: Acquire, expand, rebuild

Building boom
  • ADESA Des Moines in Iowa was rebuilt and opened in May.
  • ADESA Colorado Springs in Fountain, Colo., was rebuilt and opened in June.
  • ADESA Golden Gate in Fremont, Calif., is being rebuilt and will open in July or August.
  • ADESA Atlanta and ADESA Kansas City in Lee's Summit, Mo., will be rebuilt and opened within 12 to 24 months.

  • INDIANAPOLIS - The nation's second largest auction company is getting bigger.

    ADESA Corp. expects to add auction sites, primarily through acquisitions, and to renovate or rebuild several auctions at a cost of $150 million in the next two years, company President Jim Hallett said. The Indianapolis company operates 54 wholesale auto auctions in the United States and Canada.

    Hallett declined to say how many auctions the company plans to add or where they will be. He said ADESA would like to have representation in the Chicago, Detroit, Minneapolis and St. Louis markets.

    Hallett said the ideal acquisition would sell more than 20,000 vehicles annually, have a stellar reputation among customers and a management staff that would stay on.

    While expanding ADESA's reach is important, Hallett said ADESA is not competing with rival Manheim Auctions on a number of sites. It is competing, he said, on the level of customer service. Manheim, with headquarters in Atlanta, operates 86 auctions in North America.

    As part of the acquisition of the former ADT Automotive Inc. by Manheim last year and to satisfy federal anti-trust laws, ADESA bought eight former ADT auctions and one former Manheim auction. The company either has renovated or is renovating several sites, including former ADT auction sites, Hallett said.

    While most of ADESA's growth will come from acquisitions, the company is building a six-lane auction on 40 acres in Yaphank, N.Y., Hallett said. That auction is expected to be completed within eight months.

    ADESA also is expanding its salvage auction business - known as total loss-recovery auctions - at several of its auto auction sites. In doing so, the company changed the name of its salvage subsidiary, Auto Placement Center, to ADESA Impact, with headquarters in East Providence, R.I.

    ADESA expects to handle 3.3 million vehicles for its customers this year and sell more than 2 million of those vehicles.

    You can reach Arlena Sawyers at asawyers@crain.com

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