Good day, and welcome to OPENLANE Investor Update. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I'd like to turn the call over to Mr. Mike Eliason, Vice President of Investor Relations. Please go ahead.
Thanks, Nick. Good afternoon, and thank you for joining us today for our call. Before Peter kicks off our discussion, I'd like to remind you that this conference call contains forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks, uncertainties that may affect OPENLANE's business, prospects, and results of operations, and such risks are fully detailed in our SEC filings. In providing forward-looking statements, the company expressly disclaims any obligation to update these statements. Now I'd like to turn this call over to OPENLANE CEO, Peter Kelly. Peter?
Thank you, Mike, and good afternoon, everybody. Thank you for joining this call. I also have OPENLANE's Chief Financial Officer, Brad Lakhia, with me, and we're excited to have the opportunity this afternoon to tell you more about the proposed transaction that we just announced, our planned acquisition of Manheim Canada. We believe this transaction, when completed, will help advance our digital strategy and accelerate growth by expanding the customer base, data, and inventory available through the OPENLANE Canada marketplace. This is a transaction that we believe will benefit all OPENLANE and Manheim customers in Canada, and we're well-positioned to quickly integrate this business. We have also structured the proposed transaction in a way that we believe will deliver accelerated cash flow payback through asset sales and cost and operational synergies.
We've prepared a few slides to share that provide additional detail on the transaction, and after my brief remarks, we will open the line for questions. So with that, let me advance to the second slide. The best place to start here is with OPENLANE's purpose, which is to make wholesale easy so our customers can be more successful. That is at the heart of everything we do at OPENLANE, and it's one of the primary reasons we're pursuing this transaction. As we announced in June, we now operate a single digital marketplace in Canada with all of the buyers, all of the sellers, and all of the vehicles, all in one place. The transition to this consolidated marketplace has gone smoothly. We are seeing sustained levels of buyer and seller engagement, and we're receiving positive feedback from our customers.
Today's proposed transaction will help build on this positive momentum by adding buyers, sellers, and vehicles to our digital marketplace in Canada. We want every dealer to be able to sell and source quickly and easily on OPENLANE Canada. Higher demand drives higher supply, and ultimately, the balance of those dynamics leads to a more active and robust marketplace, where customers of every type and size can be successful. Moving to slide three, let me start by addressing the why behind this transaction. This is about advancing OPENLANE's digital strategy and accelerating our growth. I've already talked about the additional buyers and sellers, and I'll go deeper into why that's good for all buyers and sellers in a few minutes. From a digital standpoint, this transaction will leverage our leading OPENLANE technology. After the transaction closes, the buyers, sellers, and volume will be hosted on the OPENLANE Canada digital marketplace.
We are not acquiring any technology, so there are no new platforms to integrate. All listings, vehicle inspections, images, bidding, buying, and checkout will take place on openlane.ca. So on closing, we will, we will get even greater leverage from the technologies that we're, we already have deployed in the Canadian market. From a physical standpoint, Manheim Canada currently operates out of five facilities in five metro areas in Canada. Those are Vancouver, Edmonton, Toronto, Montreal, and Halifax. OPENLANE also has physical facilities, our vehicle logistics centers, in each of these metro areas. In four of those metros, we are not acquiring the Manheim facility. Instead, we will absorb the volume into our nearby OPENLANE facility. Manheim will then repurpose or sell those four facilities. In Montreal, however, OPENLANE will be acquiring the Manheim facility as part of this transaction.
We plan to migrate our existing Montreal operations to the acquired facility, which will be rebranded to OPENLANE. Once that is done, we plan to sell our current larger facility, and we believe that the proceeds from that sale will offset a substantial part of these transaction costs. The net result of all of this is that in each of those five metro areas, once we have executed this plan, we will have replaced two facilities that are less than fully utilized with one more highly utilized facility. This will create greater efficiency and scale, and ultimately, those efficiencies will benefit customers. As we consolidate the volumes in each of these five metros, we will offer all of the vehicles for sale through our single, fully digital OPENLANE Canada marketplace. Moving to slide four, I'd now like to provide more detail on what this deal will include.
First, as noted in the press release, the purchase price for this proposed transaction is approximately $95 million or CAD 130 million. It includes the entire Manheim Canada book of business, commercial and dealer. With very limited exceptions, Manheim intends to exit the Canadian market. Along with the vehicles, the proposed transaction also includes the related reconditioning, transport, storage, and other services currently performed at Manheim facilities. As noted earlier, those services will transition to OPENLANE facilities after the close. We will also retain select staff, approximately 100 employees that support key customer relationships or are needed to support the increased volume we anticipate at our OPENLANE vehicle logistics centers as we integrate these volumes. As I've said earlier, this transaction includes Manheim's Montreal facility, which will become the OPENLANE Montreal facility after the transaction is complete.
At the risk of repeating myself, the acquisition of the Manheim Montreal facility will enable us to migrate our volume and exit our larger Montreal facility, which we anticipate will cover a substantial part of the total cost of this transaction. Moving to Slide 5. When you take all of those things together, we believe this transaction will deliver meaningful and differentiated value to customers. Customers will benefit from OPENLANE's leading technology and data solutions, including our private label technology in North America, OPENLANE IQ, which supports more than 40 off-lease programs across the U.S. and Canada. Additionally, the recently combined OPENLANE Canada single marketplace already leverages the best technology features and functionality of our legacy ADESA and TradeRev platforms. All of this technology and capability generates a tremendous amount of valuable data, data on pricing, vehicle history, market trends, supply and demand, regional variations, and more.
We use that data to generate clear, actionable insights that help simplify wholesale for our customers and make transacting as easy and efficient as possible. Specific to buyers, another benefit is simply more inventory. Through our customer research, we know that a key reason buyers choose your market- choose our marketplace, is the amount and variety of inventory available. After close, OPENLANE will have the largest selection of inventory available in Canada, giving buyers more choice and the ability to source the right vehicles for any dealership at any price point. OPENLANE sellers will also benefit from a larger coast-to-coast buyer base. Seller listings will have greater visibility that local physical auctions simply cannot provide. And with more eyes, interest, and bids on every car, sellers will have confidence that the outcomes they achieve reflect the best market price possible for their vehicles.
There are also some less tangible customer benefits, like greater flexibility and convenience. Our Canadian marketplace has multiple sale formats, including Buy Now listings, 45-minute auctions, and scheduled online Simulcast auctions. This allows customers to buy and sell wholesale whenever and wherever they want, and lets them focus more time and energy on advancing their retail business. Finally, new customers will also benefit from the full portfolio of OPENLANE products and services, such as buyer and seller protections, AFC floorplan financing, transportation, reconditioning, and specialized products like OPENLANE Pro, our seller incentive program that we spoke about on our most recent earnings call. All of these programs and offerings will be available to our new customers, and we look forward to partnering with them to support their business.
So to summarize, on Slide six, we believe this is a value-creating transaction for OPENLANE, one that will help position us for continued growth and deliver great shareholder value. In prior earnings calls, I have said that we have a high hurdle for M&A transactions. I believe that this transaction clears that high hurdle by offering a compelling financial return, but also significantly advancing our digital strategy in one of our core markets. When I view this transaction through the lens of our overall investments and growth strategy, I think our primary value proposition remains exactly as it was. We are an asset-light, digital marketplace leader for wholesale used vehicles. We have a large addressable market in North America, including Canada and Europe, with meaningful opportunities for growth in all markets.
We have a clear strategy to accelerate innovation and product development, and our platform consolidation efforts and cost management culture will provide us the financial headroom to invest in our industry-leading solutions. We are cash flow positive with a strong balance sheet and with the ability to deliver shareholder value. We believe our business has the capability to generate meaningful Adjusted EBITDA growth over the next several years. That concludes my remarks on today's transaction. Thank you again for attending, and now we will open the line for questions.
Thank you. Now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. This time, we'll pause momentarily to assemble the roster. First question will be from Dan Imbro, Stephens, please go ahead.
Yep. Hey, good evening, everybody. Thanks for taking our questions, and congrats on the acquisition.
Thanks, Dan.
Thanks, Dan.
Peter, I'm not sure how much detail you can provide, but obviously, you know, buying one physical facility in Montreal, taking on other volume, I guess, any way helping size up how much of this pro forma business will be in Canada, or how much volume you guys are actually bringing on with this as we think about the growth attributable to this acquisition?
Yeah. Hey, Daniel, it's Brad here. Good evening. Thanks, thanks for the question. So I think, you know, we have to be careful in terms of what we're able to disclose from a volume perspective here, just because we, as you can appreciate, we don't break out Canada separately. But I would just say that, you know, as Peter said, we expect, you know, the consolidation not only in the Montreal facility, but also just the consolidation into our existing facilities of these volumes, these acquired volumes, will provide us meaningful, you know, scale benefits, operating benefits. And at least outside of Montreal, where we'll be consolidating these volumes, we don't really expect to have to add any incremental, you know, support or resources to be able to bring these volumes on.
Very, in very limited cases, we would have some additions, but fairly small, Daniel.
... Great. I guess maybe to follow up, just operationally, I think, so Canada is still Omni-Channel. You still have physical reconditioning in some locations and services. I guess as you're adding that scale up there, what are the operational challenges with integrating that digital marketplace or simulcast marketplace with the U.S. OPENLANE? Is it just not big enough? Is it a different buyer base? I'm curious why that could or couldn't be done now that you guys have such leading scale up there. Thanks.
Yeah, Dan, I'll speak to that. Yeah, Brad, I've got... Yeah, I'll speak to that. So yeah, just to be clear, in Canada, all of our sales are digital. So even the vehicles that are at our vehicle logistics center sell in our digital marketplaces in a 100% digital format. So that is something we intend to continue with. As Brad said, we're going to integrate this additional volume into our existing facilities in four of the metros, so we get, I think, a lot of scale and leverage through that. And then in the Montreal situation, we kind of do the opposite. We acquire the new, smaller facility, migrate our volume there, and then exit the larger facility that we currently own. So again, I think it's very consistent with our digital strategy.
I think the transaction at some level reflects the ongoing digital shift that we see in our industry, you know, with more digital transactions and ultimately, a little less requirement for the physical assets that might have been required, you know, a decade ago or whatever. So, that's the strategy. And again, you know, relative to the U.S., we also execute a digital strategy, and we think we've got a lot of opportunities to grow that as we see more and more dealer transactions moving online and as we see commercial volumes recovering in the years to come.
Great. Thanks so much.
Thanks, Dan.
Thank you. Again, if you'd like to ask a question, please press star then one. At this time, we have no further questions. We turn the call back to Mr. Peter Kelly for closing remarks.
Well, thank you, Nick, and thank you, everybody. We're excited by the transaction. We think it's gonna create, again, an opportunity to accelerate growth in Canada and create a, you know, benefits for customers and obviously a meaningful return for, for our investors as well. So we're excited about that. We look forward to closing this transaction here in short order, and we look forward to providing further updates in our, upcoming earnings calls. So thank you all very, very much.
Conference now concluded. Thank you for attending today's presentation. You may now disconnect.