Tyco International Ltd. has loosened the purse strings so its ADT Automotive Inc. auto auction subsidiary can begin a $100 million expansion.
The expansion ends several years of frustration for ADT executives, who have had to sit on the sidelines while rivals Manheim Auctions and ADESA Corp. grew. With the recent purchase of three independent auctions, ADESA had tied ADT for second place behind Manheim, which has 65 North American auctions. ADT and ADESA now operate 28 auctions.
ADT had been in limbo while its former parent company, ADT Ltd., was for sale. Tyco, an $11 billion diversified manufacturing and services conglomerate, bought ADT in 1997.
'It has not been easy to sit back and watch our competition overtake us to the extent they have,' former ADT President Michael Richardson told top ADT clients at a meeting in Phoenix last November. Richardson is now chairman of ADT Automotive. Tony Moorby has since succeeded Richardson as president.
The expansion program includes construction of two 'mega auctions,' costing $40 million apiece, and additional facilities at seven others.
ADT will build a 12-lane, 172-acre auction in Livermore, Calif., to replace the Golden Gate Auto Auction in Fremont, which ADT acquired in January 1984.
Exeter, N.H.-based Tyco also has given ADT approval to build a 20-acre auction on about 150 acres in South Florida. The Lauderdale-Miami Auto Auction would be among the nation's largest. ADT will spend $1.6 million on improvements at its 68-acre Davie, Fla., auction in the same area.
Other auctions to be expanded:
San Diego Auto Auction - to add 24 acres for parking, three auction lanes and additional reconditioning capacity.
Baltimore-Washington Auto Exchange - to add 17 acres of parking space.
Metro Auto Auction of Kansas City - nine additional acres of parking, a new dealer check-in area and additional office space.
West Palm Beach Auto Auction - expanded paint and body shop.
In addition, the Dallas Auto Auction recently added 56 acres.
ADT's Automotive Remarketing Solutions unit is moving to a new 28,000-square-foot building and will get its own AS-400 computer system. Until now, the unit has been sharing the mainframe computer with the headquarters office.
ADT also is upgrading the AS-400 computer systems at all auctions and its headquarters.