Dec. 22 (Bloomberg) -- Adesa Inc., the second-largest auctioneer of used cars in the U.S., agreed to be acquired by a group of investors including Goldman Sachs Group Inc. for $2.5 billion.

Shareholders will receive $27.85 a share in cash, about 10 percent more than the stock's closing price yesterday, Carmel, Indiana-based Adesa said in a statement. Goldman, Kelso & Co., ValueAct Capital and Parthenon Capital will assume $700 million in debt, putting the total transaction value, counting the transfer of a salvage-auction unit, at $3.7 billion.

Adesa went public two years ago after being spun off by Minnesota energy supplier Allete Inc. It auctions more than 5,000 used vehicles a day, primarily to auto dealers, through 53 sites in North America, most of them in the U.S.

``It's a tough market for all of the auctions,'' said Art Spinella, president of CNW Marketing Research in Bandon, Oregon. A surge in leasing in the late 1990s funneled high volumes of good-quality used vehicles through auctions when leases expired, he said. ``Things won't start turning back around until 2010.''

As part of the accord, Insurance Auto Auctions Inc., a salvage auctioneer, will be merged with Adesa. Insurance Auto is owned by Kelso, Parthenon and some of Insurance Auto's senior executives.

Shares of Adesa rose $2.38, or 9.4 percent, to $27.78 at 4:21 p.m. in New York Stock Exchange composite trading. It was their biggest gain in 22 months.

Buyout Record

The sale adds to a record year for U.S. buyouts, with firms announcing $717 billion in takeover deals, almost triple the amount for all of 2005, according to data compiled by Bloomberg.

Adesa, established in 1989, raised $150 million in its 2004 initial public offering. It has posted profits ranging from $21.5 million to $36.3 million in every quarter since.

In addition to its used-vehicle auction sites, the company has 37 salvage operations and 84 loan offices. It had revenue of $968.8 million and profits of $126 million for 2005.

Closely held leverage-buyout firms use cash from investors plus their own funds and debt secured on the companies they buy to finance their deals. They typically seek to expand companies or improve performance before selling them within five years to other funds or investors in initial public offerings.

UBS Investment Bank advised Adesa, while Credit Suisse Securities LLC advised Adesa's board of directors.

Used Car News, a trade publication based in St. Clair Shores, Michigan, ranks Adesa as the second-largest auto auction company, behind Manheim Auctions Inc. Manheim is a unit of closely held Cox Enterprises Inc. of Atlanta.

To contact the reporter on this story: Jeff Bennett in Southfield, Michigan, at jbennett17@bloomberg.net

Last Updated: December 22, 2006 16:34 EST