ADESA, Inc. - Acquisition of APC and ComSearch in 2001

Acquisition of APC and ComSearch in 2001

January 2001 saw the purchase of two Rhode Island-based firms, Auto Placement Center, Inc. (APC) and ComSearch, Inc., for a total of $62.4 million. The latter was a web-based provider of parts location and insurance adjustment audit services, and APC ran eight salvage auctions in New England. ADESA also published the first edition of Global Vehicle Remarketing, a 68-page statistical report on the used vehicle industry. The publication was intended to inform the industry, media, and lawmakers, as well as help to raise ADESA's profile. A quarterly report, Pulse, was added later.

In May 2001 the firm bought an auction in Tulsa, Oklahoma, and in October Brian Warner was appointed president, with Jim Hallett remaining in charge as CEO. Later in the year, ADESA bought a salvage auction in North Carolina.

In the summer of 2002 the company was restructured to combine its marketing and sales departments, and the commercial remarketing staff was moved from offices to auction sites. The firm also sold its trucking unit, Great Rigs, Inc., and replaced its San Francisco-area auction with a new $60 million facility located on 230 acres. The 12-lane auction was California's largest. The site it replaced was later taken over by an ADESA Impact salvage auction.

The year 2002 also saw a new salvage auction opened in Orlando, Florida, and the firm's Industry Relations and Analytical Services department starting to supply monthly reports to the U.S. Bureau of Economic Analysis. ADESA recently had added other services to its portfolio, including AutoScan diagnostic certification programs, EndTrust end-of-term leasing services, Auction Management Computer Systems, and Micro 21 dealer software. The company's revenues reached $844 million during the year, with profits of $93 million.

January 2003 saw Brian Warner reassigned to head the company's Canadian operations, while Jim Hallett took back the title of president. In October the firm's parent, now known as ALLETE, Inc., announced that it would spin off ADESA as a separate entity. One share of ADESA stock would be issued for each share owned in ALLETE. The move was taken to increase shareholder value, as ADESA now accounted for almost two-thirds of ALLETE's revenues.

The fall of 2003 also saw a new auction facility opened near Atlanta, Georgia, to serve Chrysler Group dealers. The eight-lane auction was situated on 260 acres and featured a 90,000-square-foot reconditioning center. The company had by now also introduced LiveBlock, which enabled dealers to participate in auctions at certain sites via the Internet. ADESA had acquired the technology from a Canadian firm. The following spring saw the company move its headquarters to a new building in the Indianapolis suburb of Carmel, after first considering offers from several other cities.