On June 27, 2019, KAR Auction Services, Inc. (“KAR”) entered into a Separation and Distribution Agreement (the “Separation and Distribution Agreement”) with IAA, Inc. (f/k/a IAA Spinco Inc.), a wholly owned subsidiary of KAR at that time (“IAA”), that sets forth, among other things, certain agreements between KAR and IAA regarding the principal transactions necessary to effect the separation of IAA from KAR and the distribution (as described below). On June 27, 2019, in connection with the completion of the separation and distribution, KAR entered into certain other agreements with IAA as contemplated by the Separation and Distribution Agreement that provide for the separation and allocation between KAR and IAA of the assets, employees, liabilities and obligations of KAR and its subsidiaries attributable to periods prior to, at and after IAA’s separation from KAR and govern the relationship between KAR and IAA subsequent to the completion of the separation and distribution. These agreements include:

The description of the agreements set forth under this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the complete terms and conditions of those agreements, which are attached hereto as Exhibits 2.1, 10.1, 10.2 and 10.3.

Item 2.01 Completion of Acquisition or Disposition of Assets.

Effective as of 12:01 a.m., Eastern Daylight Time (“EDT”), on June 28, 2019, the distribution date, KAR distributed all of the issued and outstanding shares of IAA common stock to KAR’s common stockholders of record as of 5:00 pm EDT on June 18, 2019, the record date for the distribution, on a pro rata basis. On the distribution date, each KAR common stockholder of record received one share of IAA common stock for every one share of KAR common stock held by such stockholder as of the record date. No fractional shares of IAA’s common stock were distributed. Fractional shares of IAA’s common stock were aggregated and sold in the public market, and the aggregate net cash proceeds of these sales were distributed pro rata to KAR common stockholders who would otherwise have been entitled to receive fractional shares of IAA’s common stock. As a result of the distribution, KAR does not beneficially own any shares of IAA common stock. The separation and distribution resulted in IAA becoming an independent, publicly traded company, trading on the New York Stock Exchange under the symbol “IAA.”

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective as of 11:59 p.m., EDT, on June 27, 2019, the time of the separation, Lynn Jolliffe and John P. Larson each resigned as a director of KAR. Ms. Jolliffe and Mr. Larson are now directors of IAA. KAR intends to fill the vacancies created by the resignations at the next meeting of its board of directors in July 2019.

Item 8.01 Other Events.

On June 28, 2019, KAR issued a press release announcing the completion of the separation and distribution. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

† Certain information has been excluded from this exhibit because it is not material and would likely cause competitive harm to the registrant if publicly disclosed.

KAR Auction Services, Inc. Exhibit
EX-2.1 2 nc10002893x1_ex2-1.htm EXHIBIT 2.1 Exhibit 2.1 CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED. SEPARATION AND DISTRIBUTION AGREEMENT BY AND BETWEEN KAR AUCTION SERVICES,…
To view the full exhibit click here

About KAR Auction Services, Inc. (NYSE:KAR)

KAR Auction Services, Inc. is a provider of whole car auction services in North America, and salvage auction services in North America and the United Kingdom. The Company operates through three segments: ADESA, Inc. (ADESA Auctions), Insurance Auto Auctions, Inc. (IAA) and Automotive Finance Corporation (AFC). The ADESA segment is a provider of whole car auctions and related services to the vehicle remarketing industry in North America. The Company operates as IAA in the United States and Impact Auto Auctions in Canada. The AFC segment is a provider of floorplan financing to independent used vehicle dealers. It facilitates a marketplace by providing auction services for sellers of used, or whole car, vehicles and salvage vehicles through its approximately 240 physical auction locations, and multiple Internet venues. The Company facilitates the sale of over 4.4 million used and salvage vehicles.