CARMEL, IND., March 22 /CNW/ - ADESA, Inc. (NYSE: KAR)(the "Company")
announced today that it is offering (the "Offer") to purchase for cash any and
all of its outstanding $125,000,000 aggregate principal amount of 7 5/8%
Senior Subordinated Notes due 2012 (the "Notes"), on the terms and subject to
the conditions set forth in the Offer to Purchase and Consent Solicitation
Statement dated March 22, 2007 and the accompanying Consent and Letter of
Transmittal (together, the "Offer Documents"). The Company is also soliciting
consents (the "Consent Solicitation") from holders of the Notes for certain
amendments that would, among other things, eliminate substantially all of the
restrictive covenants and certain events of default contained in the indenture
under which the Notes were issued. Adoption of the proposed amendments
requires the consent of holders of at least a majority of the aggregate
principal amount of the Notes outstanding.
As previously announced on December 22, 2006, the Company entered into a
definitive merger agreement under which affiliates of Kelso & Company, GS
Capital Partners, ValueAct Capital and Parthenon Capital will acquire all of
the Company's outstanding common stock for $27.85 per share in cash (the
"Merger"). The completion of the Offer and Consent Solicitation is not a
condition to the consummation of the Merger.
The Consent Solicitation will expire at 5:00 p.m., New York City time, on
April 5, 2007, unless earlier extended or terminated (such date and time, as
the same may be modified, the "Consent Time"). The Offer will expire at 8:00
a.m., New York City time, on April 23, 2007, unless extended or earlier
terminated (such date and time, as the same may be modified, the "Expiration
The total consideration to be paid for each $1,000 in principal amount of
Notes validly tendered and accepted for purchase, subject to the terms and
conditions of the Offer Documents, will be paid in cash and will be calculated
based on a fixed spread pricing formula. The total consideration will be
determined on the third business day prior to the Expiration Time based, in
part, upon a fixed spread of 50 basis points over the yield on the 4.875% U.S.
Treasury Note due May 31, 2008. The total consideration includes a consent
payment equal to $30 per $1,000 in principal amount of Notes (the "Consent
Payment"). The detailed methodology for calculating the total consideration
for the Notes is outlined in the Offer Documents.
Holders who validly tender their Notes on or prior to the Consent Time
will be eligible to receive the total consideration. Holders who validly
tender their Notes after the Consent Time, but on or prior to the Expiration
Time, will be eligible to receive the total consideration less the Consent
Payment. In either case, all Holders who validly tender their Notes will
receive accrued and unpaid interest up to, but not including, the date of
Holders who tender their Notes must consent to the proposed amendments.
Tendered Notes may not be withdrawn and consents may not be revoked after the
The Company's Offer and Consent Solicitation are conditioned on, among
other things, the following:
-- the closing of the Merger shall have occurred;
-- all of the loans, reimbursement obligations and other obligations and
liabilities of the Company under the Company's Amended and Restated Credit
Agreement, dated as of July 25, 2005, shall have been paid in full and all
commitments of the lenders thereunder to make loans or issue letters of credit
shall have been terminated;
-- the Company shall have received valid consents from holders of a
majority of the aggregate principal amount of the Notes; and
-- a supplemental indenture which implements the proposed amendments in
respect of the Notes upon receipt of the consents required for those
amendments shall have been executed and delivered.
The Company has retained Bear, Stearns & Co. Inc. to act as sole Dealer
Manager for the Offer and as the Solicitation Agent for the Consent
Solicitation. Bear, Stearns & Co. Inc. can be contacted at (212) 272-5112
(collect) or (877) 696-BEAR (toll free). D.F. King & Co., Inc. is the
Information Agent and can be contacted at (212) 269-5550 (collect) or (888)
628-9011 (toll free). Copies of the Offer Documents and other related
documents may be obtained from the Information Agent.
The tender offer and consent solicitation are being made solely on the
terms and conditions set forth in the Offer Documents. Under no circumstances
shall this press release constitute an offer to buy or the solicitation of an
offer to sell any securities of the Company. This press release also is not a
solicitation of consents to the proposed amendments to the indenture. The
tender offer and consent solicitation are not being made to holders of Notes
in any jurisdiction in which the making or acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such jurisdiction.
None of the Company, the Dealer Manager or the Information Agent makes
any recommendation as to whether holders of the Notes should tender their
Notes or consent to the proposed amendments to the indenture and no one has
been authorized by any of them to make such recommendations. Holders must make
their own decisions as to whether to consent to the proposed amendments to the
indenture and to tender the Notes.
About ADESA, Inc.
Headquartered in Carmel, Indiana, ADESA, Inc. (NYSE: KAR) is North
America's largest publicly traded provider of wholesale vehicle auctions and
used vehicle dealer floorplan financing. The Company's operations span North
America with 54 ADESA used vehicle auction sites, 42 impact salvage vehicle
auction sites and 85 AFC loan production offices. For further information on
ADESA, Inc., visit the Company's website at http://www.adesainc.com.
This press release contains forward-looking statements based on current
ADESA management expectations. Those forward-looking statements include all
statements other than those made solely with respect to historical fact.
Numerous risks, uncertainties and other factors may cause actual results to
differ materially from those expressed in any forward-looking statements.
These factors include, but are not limited to, (1) the occurrence of any
event, change or other circumstances that could give rise to the termination
of the merger agreement; (2) the outcome of any legal proceedings that have
been or may be instituted against ADESA and others relating to the merger
agreement; (3) the inability to complete the Merger due to the failure to
obtain stockholder approval or the failure to satisfy other conditions to
consummate the Merger; (4) risks that the proposed transaction disrupts
current plans and operations and the potential difficulties in employee
retention as a result of the Merger; (5) the effect of the announcement of the
Merger on our customer relationships, operating results and business
generally; (6) the ability to recognize the benefits of the Merger; (7) the
amount of the costs, fees, expenses and charges related to the Merger; (8)
significant changes in volume of vehicles bought, sold or financed by ADESA's
customers; (9) the mix of vehicles sold at ADESA's auctions and OEM pricing
programs; (10) fluctuations and volatility in the market value of used and
salvage vehicles; (11) ADESA's ability to execute its strategic initiatives
successfully; and (12) other risks described from time to time in ADESA's
filings with the Securities and Exchange Commission, including the Annual
Report on Form 10-K for 2006. Many of the factors that will determine the
outcome of the subject matter of this press release are beyond ADESA's ability
to control or predict. ADESA undertakes no obligation to revise or update any
forward-looking statements, or to make any other forward-looking statements,
whether as a result of new information, future events or otherwise.
For further information:
For further information: ADESA, Inc. Analyst Contact: Jonathan Peisner,
317-249-4390 Treasurer OR Media Contact: Julie Vincent, 317-249-4233 Director
of Corporate Communications