(Reuters) – KKR & Co LP and Apollo Global Management LLC are among a handful of private equity firms considering a buyout of KAR Auction Services Inc, according to several people familiar with the matter, in a deal that could top $4 billion.
Reuters first reported in August that the vehicle auction company, which has a market value of roughly $2.5 billion and debt of about $1.8 billion, has held exploratory talks with buyout firms about a potential leveraged buyout.
KAR Auction is in the early stages of buyout discussions after hiring investment bank Evercore Partners to solicit offers, and there is no guarantee of a deal, the sources said.
Kelso & Co, Goldman Sachs Capital Partners, ValueAct Capital LLC and Parthenon Capital LLC collectively own about 78 percent of KAR Auction.
KAR Auction declined to comment while its main shareholders did not respond to a request for comment. KKR and Apollo also declined to comment.
Carmel, Indiana-based KAR Auction, through its used-car wholesale auctions arm ADESA Inc, is No. 2 in U.S. whole car auctions behind Cox Enterprises Inc’s Manheim unit, according to Standard & Poor’s.
(Reporting by Greg Roumeliotis and Soyoung Kim in New York; Editing by Jeffrey Benkoe)
Photo of Henry Kravis by Shannon Stapleton of Reuters