KAR Auction Services' CEO and Chairmen, Jim Hallett, reflects on the spinoff of KAR's salvage auction company into its own separate entity.
The separation was completed recently, when KAR's Insurance Auto Auctions unit officially became IAA Inc. and its stock began trading on the New York Stock Exchange under the ticker symbol IAA.
The split of the two companies simplified what Hallett had previously described as “a very complex business model.”
As an independent company, IAA will remain based in Westchester, Illinois, a Chicago suburb, and will continue to focus on the salvage vehicle marketplace, serving insurers and buyers including dealers, recyclers and metal-scrapping companies.
IAA, which has 3,600 employees, accounted for about 35 percent of KAR’s total revenue in 2018, or about $1.32 billion.
KAR remains headquartered in Carmel, where it has more than 1,000 employees, and will concentrate on growing its car auction marketplace business through acquisitions and international expansion, and by bolstering its digital, data analytical and technology capabilities.
Hallett said the major goals of the separation were to increase shareholder value and put each company in a situation in which they could concentrate on their core businesses and better market themselves.
“We’re extremely happy so far,” Hallett stated. “I think we’ve checked all the boxes on our goals.”
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