Carvana (CVNA) made a sweet acquisition announced on February 24, 2022. The company acquired a major car auction service in the U.S. creating an awesome synergy.
Carvana acquires KAR’s ADESA’s U.S. auction unit for $2.2B in cash
Carvana (CVNA) signed a definitive agreement to acquire ADESA’s U.S. physical auction business, a wholly owned subsidiary of KAR Global (KAR), for $2.2B in cash. ADESA U.S. is the second largest provider of wholesale vehicle auction solutions in the United States with 56 sites and approximately 4,500 corporate and operations team members, the company said in a statement. Carvana will continue to operate ADESA U.S.’s existing wholesale auction business and related services under the ADESA brand. ADESA U.S. President John Hammer additional senior and executive leadership and teams will transition to Carvana after the deal is closed. The ADESA U.S. business generated over $800M of revenueThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th... and over $100M of EBITDA in 2021. Carvana has received committed financing of up to $3.275B from JPMorgan Chase Bank N.A. and Citi and intends to fund the purchase price and an additional $1B in improvements across the 56 sites through a committed debt financing.
“We are thrilled to welcome ADESA U.S. to the Carvana family. Together with Carvana’s existing operations, ADESA U.S.’s nationwide infrastructure network and robust, highly profitable business will accelerate Carvana’s progress toward becoming the largest and most profitable automotive retailer,” said Ernie Garcia, Carvana Founder and CEO. “Over time, we will leverage our combined infrastructure and complementary expertise to deliver even better selection, better value, and faster delivery times to our retail customers while simultaneously raising the bar and providing more access and better experiences to our wholesale customers.”
Carvana and ADESA U.S.’s footprints are highly complementary and combining them extends the collective reach of the two businesses. ADESA U.S.’s existing and potential reconditioning operations can contribute approximately 2M incremental units to Carvana’s annual production at full utilization. Further, 78% of the U.S. population lives within 100 miles of either an ADESA U.S. or existing Carvana inspection and reconditioning center, meaning customers will have access to more vehicles with faster delivery times than ever before.
“ADESA earned its place as a respected brand in our industry because of its dedicated team and robust operations,” Garcia said. “We have long admired ADESA, having come to appreciate their approach as a customer for many years. We look forward to joining forces and continuing on the path of delivering the best customer offering for both retail and wholesale customers.”
Carvana will continue to operate ADESA U.S.’s existing wholesale auction business and related services under the ADESA brand. ADESA U.S. President John Hammer additional senior and executive leadership and teams will transition to Carvana after the deal is closed. The ADESA U.S. business generated over $800M of revenue and over $100M of EBITDA* in 2021.
“ADESA and Carvana are committed to ensuring a smooth, seamless transition for the ADESA U.S. physical auction customers,” said John Hammer, President of ADESA. “We look forward to bringing our innovative teams together and combining the power of our physical auction and retail capabilities to better serve buyers, sellers and consumers across the automotive industry.”
Carvana has received committed financing of up to $3.275B from JPMorgan Chase Bank N.A. and Citi and intends to fund the purchase price and an additional $1 billion in improvements across the 56 sites through a committed debt financing.
Carvana is advised by Citi and J.P. Morgan Securities LLC as financial advisors and Kirkland & Ellis LLP as legal counsel.
Carvana Announces Fourth Quarter and Full Year 2021 Results
On February 24, 2022, Carvana Co. (NYSE: CVNA), the leading e-commerce platform for buying and selling used cars, announced financial results for the quarter and year ended December 31, 2021. Carvana reported Q4 EPS of ($1.02) versus the consensus estimate of (82c). The company reported Q4 revenue of $3.75B versus the consensus estimate of $3.53B.
Fourth Quarter 2021
Retail Units Sold of 113,016, an increase of 57% YoY
Revenue of $3.753 Billion, an increase of 105% YoY
Total Gross Profit per Unit of $4,566, an increase of $1,187 YoY
Full Year 2021
Retail Units Sold of 425,237, an increase of 74% YoY
Revenue of $12.814 Billion, an increase of 129% YoY
Total Gross Profit per Unit of $4,537, an increase of $1,285 YoY
First full year with positive EBITDA, excluding one-time items
“2021 was a year full of meaningful milestones. We sold our 1 millionth car, achieved our first positive earnings quarter, and became the fastest growing e-commerce company in U.S. history,” said Ernie Garcia, founder and CEO of Carvana. “We’re extremely proud of these milestones but most proud of being named the #1 retailer on Forbes 2022 best employers list in the U.S. None of this is possible without an incredible team comprised of exceptional people who care deeply about delivering great experiences to our customers.”
📺 Why I Think Carvana Will Be a Top Stock By The End Of The Decade[embedyt] https://www.youtube.com/watch?v=x1mvmHv9OEA[/embedyt]
📉 CVNA Stock Technical Analysis
That’s a crazy bullish divergence between large players volume and price. The short-term trend is negative, as is the long-term trend. CVNA is one of the lesser performing stocks in the Specialty Retail industry. 83% of 115 stocks in the same industry do better. CVNA is currently making a new 52 week low. This is a very bad signal. CVNA is lagging the S&P500 Index which is trading in the middle of its 52-week range. Prices have been falling strongly lately, it is better to avoid new long positions here.
There is support at 126.04 from a horizontal line in the weekly time frame.
There is a resistance zone ranging from 133.10 to 133.82. This zone is formed by a combination of multiple trend lines and important moving averages in the daily time frame. There is also resistance at 161.12 from a trend line in the daily time frame.
The technical rating of CVNA is bad and it also does not present a quality setup at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. CVNA stock has a Setup Rating of 3 out of 10. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when CVNA stock consolidates and has a Setup Rating of 8 or higher.