New York-based private equity firm Kelso & Co. has signed a definitive merger agreement with Insurance Auto Auctions, a publicly traded provider of automotive salvage services to the insurance industry, in a transaction valued at $385 million (€292 million).
Under the terms of the deal, Kelso will pay $28.25 per share for ownership of the Westchester, Illinois-based company, a 25 percent premium to Insurance Auto’s Tuesday closing price of $22.41. The company’s board and Value Act Capital Partners, Insurance Auto’s largest stockholder with an approximate 30 percent stake, have both voted in favor of the deal. Tom O’Brien, the company’s chief executive officer, will continue to lead the company post-acquisition.
The investment bank William Blair & Co. acted as the company’s financial advisor in connection with the deal.
Representatives of Insurance Auto declined comment. Calls to Kelso were not returned.
Earlier this month, five Kelso employees were passengers aboard a Chicago-bound private plane that crashed upon takeoff from Teterboro airport in New Jersey. Although twenty people were injured in the accident, including bystanders and firefighters, there were no fatalities.
In January 2005, the private equity firm announced the acquisition of Del Laboratories, a manufacturer of cosmetic and over-the-counter pharmaceuticals, for $486 million.
Founded in 1971 by Louis Kelso, Kelso & Co. has invested six private equity funds with total capital exceeding $2.8 billion. The firm is currently investing its seventh fund, Kelso Investment Associates VII, which closed on $2.1 billion in 2003.