KAR Global’s $550 Million Series A Convertible Preferred Stock Offering


Simpson Thacher represented funds advised by Apax Partners in the transaction, while Wachtell, Lipton, Rosen & Katz served as legal advisor to Periphas Capital, and Skadden advised KAR Auction Services.

Funds advised by Apax Partners entered into an agreement, with participation by Periphas Capital, L.P., to purchase $550 million of Series A Convertible Preferred Stock of KAR Auction Services, Inc. (“KAR Global”) (NYSE: KAR).

The preferred stock has a 7.0% dividend which shall be paid in-kind for the eight quarters following closing, and thereafter in cash or in-kind at KAR’s option. The initial conversion price of $17.75 per share represents an approximately 42% premium to KAR’s closing price of $12.52 per share on Friday, May 22, 2020.

KAR Global provides sellers and buyers across the global wholesale used vehicle industry with technology-driven remarketing solutions. KAR Global’s platform supports whole car, financing, logistics and other ancillary and related services, including the sale of nearly 3.8 million units valued at approximately $40 billion through its auctions in 2019.

Apax Partners is a leading global private equity advisory firm. Over its more than 40-year history, Apax Partners has raised and advised funds with aggregate commitments of c.$50 billion. The Apax Funds invest in companies across four global sectors of Tech & Telco, Services, Healthcare and Consumer. These funds provide long-term equity financing to build and strengthen world-class companies.

Goldman Sachs & Co. LLC acted as lead financial advisor, J.P. Morgan Securities LLC acted as financial advisor to KAR.

The Simpson Thacher team advising Apax included Ryerson Symons, Jakob Rendtorff (Picture), Shaun Levor, Keegan Lopez and Jess Yoon (M&A); Dan Webb, Sean Dougherty and Caitlin Wood (Capital Markets); Sophie Staples (Tax); Jennifer Levitt, Adam Shapiro, Mike Vernace, Mimi Cheng and Mike Ratay (Credit); Jon Lindabury (Derivatives); Andrew Blau, Patricia Adams and Emily Manns (Executive Compensation and Employee Benefits); Sara Razi, Ellen Frye and Kelly Karapetyan (Antitrust); Mike Isby (Environmental); Lori Lesser and Alysha Sekhon (Intellectual Property); and Krista McManus (Real Estate).

The Skadden team advising KAR included New York partners Dwight Yoo, Dohyun Kim, Gregory Fernicola, Pamela Endreny,David Rievman and Steve Messina.

Involved fees earner: Patricia Adams – Simpson Thacher & Bartlett; Andrew Blau – Simpson Thacher & Bartlett; Mimi Cheng – Simpson Thacher & Bartlett; Sean Dougherty – Simpson Thacher & Bartlett; Ellen Frye – Simpson Thacher & Bartlett; Michael Isby – Simpson Thacher & Bartlett; Jakob Rendtorff – Simpson Thacher & Bartlett; Kelly Karapetyan – Simpson Thacher & Bartlett; Lori Lesser – Simpson Thacher & Bartlett; Jennifer Levitt – Simpson Thacher & Bartlett; Shaun Levor – Simpson Thacher & Bartlett; Jonathan Lindabury – Simpson Thacher & Bartlett; Emily Manns – Simpson Thacher & Bartlett; Krista McManus – Simpson Thacher & Bartlett; Michael Ratay – Simpson Thacher & Bartlett; Sara Razi – Simpson Thacher & Bartlett; Alysha Sekhon – Simpson Thacher & Bartlett; Adam Shapiro – Simpson Thacher & Bartlett; Sophie Staples – Simpson Thacher & Bartlett; Ryerson Symons – Simpson Thacher & Bartlett; Michael Vernace – Simpson Thacher & Bartlett; Daniel Webb – Simpson Thacher & Bartlett; Caitlin Wood – Simpson Thacher & Bartlett; Jess JuYoung Yoon – Simpson Thacher & Bartlett; Gregory Fernicola – Skadden Arps Slate Meager & Flom; Dohyun Kim – Skadden Arps Slate Meager & Flom; Pamela Lawrence Endreny – Skadden Arps Slate Meager & Flom; Steven Messina – Skadden Arps Slate Meager & Flom; David Rievman – Skadden Arps Slate Meager & Flom; Dwight Yoo – Skadden Arps Slate Meager & Flom;

Law Firms: Simpson Thacher & Bartlett; Skadden Arps Slate Meager & Flom;

Clients: Apax Partners; KAR Auction Services;

Author: Ambrogio Visconti