Alerts
Spinoff Report
KAR & IAA: Both Jump on Spinoff, Further Upside Ahead for IAA
The first day of trading for KAR Auction Services, Inc. (KAR) and its Spinoff IAA, Inc. (IAA) saw net gains for shareholders and an outperformance of the S&P Total Market Cap Index, with those gains extending into yesterday's trading with significant jumps for both companies. That said, there's still more room for growth for both KAR and IAA, with long-term catalysts like the potential separation of the Parent's AFC segment and IAA's superior margin profile and duopoly with Copart, Inc. (CPRT).

  • Long-Term Investors Recommended to Hold or Increase KAR & IAA at Current Levels for Growth Prospects
  • +6% Returns for Each Following the Completion of the Spinoff on June 28, 2019 / 1:1 Distribution Ratio
  • $1.3bn Debt Transfer Improved KAR's Credit Profile from 2.5x to 2x / Potential Separation Case for AFC Segment
  • IAA is the First Spinoff in the Insurance Auction Space / Demands Premium Due to Higher Margin Profile
  • IAA Increases its Spinoff Model Portfolio Weighting by +3% at the End of Today's (July 2) VWAP / KAR MP Holding Maintained
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