Good market positions Recession-resistant business Experienced management team Very high leverage Below-average cash flow adequacy Dependence of free cash flow on merger synergies Acquisition integration risk The ratings on Carmel, Ind.-based KAR Holdings Inc. reflect its heavy debt from its leveraged buyout in 2007 and low prospective cash flow generation, partly offset by a weak business position. The company was formed as a result of the April 2007 merger of ADESA Inc. and Insurance Auto Auctions Inc. (IAAI). KAR is owned by privately held KAR LLC, which is controlled by Kelso & Co., Goldman Sachs Capital Partners, ValueAct Capital LLC, and Parthenon Capital. Total balance sheet debt at March 31, 2008, was $2.6 billion, including the senior credit facilities and...
Companies mentioned in this report are: KAR Auction Services Inc.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Full Analysis