ADESA, Inc. - Returning to Public Ownership in 2004

Returning to Public Ownership in 2004

In June 2004 the spinoff from ALLETE got underway with the sale of 6.25 million shares of stock on the New York Stock Exchange. The remaining 93 percent of the firm's shares were distributed to ALLETE shareholders in September. ADESA had by now also issued $125 million in bonds, as well as securing $525 million in loan commitments from a total of 29 banks.

Key Dates:

1989:
Mike Hockett forms Auto Dealers Exchange Management, Inc. in Alabama.
1992:
Hockett, with four auctions, and Gary Pedigo, with one, form ADESA, launching its initial public offering (IPO).
1993:
The company's first Canadian auctions are purchased.
1994:
Automotive Finance Corp. and a Massachusetts GM plant are acquired; Pedigo leaves.
1995:
Minnesota Power & Light buys control of ADESA; Impact Auctions is purchased.
1996:
Minnesota Power buys the remainder of the firm; James Hallett replaces Hockett as CEO.
1997:
Great Rigs, Inc. trucking subsidiary is formed.
2000:
The company acquires the 13-site Canadian Auction Group and eight ADT auctions.
2001:
Auto Placement Center and ComSearch are purchased; the company's Global Vehicle Remarketing report debuts.
2002:
Great Rigs is sold.
2003:
LiveBlock Internet auctions are introduced.
2004:
ADESA is spun off on the New York Stock Exchange; David Gartzke is named CEO.

After the spinoff was complete ALLETE CEO David Gartzke left that firm to become CEO, president, and chairman of ADESA, which he had been helping run since the previous summer. The year 2004 also saw the firm open a new salvage auction in Sacramento, California, and an auction in Mexico, its first in that country. ADESA was now planning expansions to several of its existing sites, including Manville, New Jersey, and Montreal. The firm also was working with Toyota Financial Services to offer direct vehicle sales between dealers over the Internet. LiveBlock was now available at an increasing number of ADESA auction sites as well, with 6 percent of sales at such sites made to online bidders. Sales for the year topped $931 million, and income hit $105.3 million.

In early 2005 ADESA completed the repurchase of some 4.4 million shares of stock to boost its value. The firm also upgraded LiveBlock, which was now offered at most of its sites, so that bidders could view multiple auctions at the same time. Expansion continued during the year with the construction of a new salvage auction near Hartford, Connecticut. The firm's 2005 Global Remarketing Report projected continuing growth in the market, with U.S. used vehicle sales expected to rise from 42.7 million in 2004 to 44.4 million in 2005, and 47.7 million in 2009.

In more than 15 years of steady, sometimes rapid growth, ADESA, Inc. had assembled the second largest chain of used-vehicle auctions in North America. The company had added complementary businesses in financing, reconditioning, importation, and other services along the way, and was now expanding its Internet sales capabilities.