OPENLANE's Acquisition of Manheim Canada

05 Dec, 2023

OPENLANE's Acquisition of Manheim Canada

OPENLANE, Inc. (NYSE: KAR), a prominent player in digital wholesale used vehicle markets, has finalized a definitive agreement to acquire Manheim Canada from Cox Automotive, pending customary closing conditions. The acquisition, valued at $130 million CAD or approximately $95 million USD, focuses on fortifying OPENLANE's digital strategy by integrating Manheim Canada's inventory, customers, sellers, and data into OPENLANE's existing Canadian digital marketplace, launched earlier this year.

Peter Kelly, CEO of OPENLANE, highlighted the strategic significance of this move, emphasizing how it will propel their digital strategy and strengthen their market presence. By combining forces with Manheim Canada, OPENLANE aims to accelerate commercial and dealer growth, ensuring an enhanced customer experience. The integration will provide buyers with increased inventory choices and streamlined access to high-quality vehicles. Simultaneously, sellers will benefit from broader buyer reach, optimizing market results on every sale. Furthermore, the augmented data set will facilitate improved vehicle recommendations, pricing insights, and informed wholesale decision-making for customers.

Following the agreement, OPENLANE will assume Manheim Canada's customer relationships and merge its operations into OPENLANE Canada. The integration process includes consolidating inventory within the OPENLANE digital marketplace, integrating staff to facilitate a seamless transition for customers, and ensuring uninterrupted access to ancillary services such as inspections, reconditioning, and logistics.

Trevor Henderson, chief operating officer of OPENLANE Canada, expressed enthusiasm about welcoming new customers to their platform, highlighting their commitment to providing innovative technology and localized support. The integration aims to simplify wholesale operations by leveraging AI-enhanced inspections, flexible sale formats, swift payment, and a suite of ownership and reconditioning services.

The acquisition also involves the purchase of Manheim's Montreal facility, with plans to transition operations, personnel, and inventory to this new location. For other locations, OPENLANE intends to transition most customers and business operations to nearby vehicle logistics centers. Additionally, OPENLANE plans to market and sell its existing Montreal facility post-acquisition, expecting substantial proceeds to fund a significant portion of the deal, while other vehicle logistics center locations and operations will remain unchanged.