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ADESA, Inc. Announces Tender Offer and Consent Solicitation for Its 7 ⅝% Senior Subordinated Notes Due 2012

CARMEL, Ind.--ADESA, Inc. (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 ⅝% 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 Time”).

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 settlement.

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 Consent Time.

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. 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.

Forward-Looking Statements

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.