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Insurance Auto Auctions

With operations throughout the United States, Insurance Auto Auctions, Inc. (IAA) is one of the auto salvage industry’s top chains. The company was among the first to conceive of and undertake industry consolidation through acquisition, expanding from five branches with an annual vehicle volume of 30,000 units in 1991, to 46 locations and 443,000 vehicles per year in 1996. Fueled by well over a dozen acquisitions, lAA’s sales increased from $38 million in 1990 to almost $282 million by 1996, catapulting the company to a leading role in its highly fragmented industry. Though it boasted top dollar and unit volume, IAA lagged chief rival Copart, Inc. in terms of number of outlets and profitability. In fact, lAA’s net income was on a downward trend in the mid-1990s, declining from nearly $11 million in 1994 to just over $3 million in 1996.

Founder and longtime CEO Bradley Scott relinquished day-to-day leadership of the company in March 1996, but continued to serve as chairman of the board. His successor, Jim Alampi, was recruited from a chemical distribution company. Scott’s retirement capped a half-decade of turnover in lAA’s upper echelon; as of 1996, all but three of the company’s top eleven executives joined the chain after its 1991 initial public stock offering. Around the same time, IAA reorganized into three geographic divisions and moved its headquarters from Southern California to a suburb of Chicago, Illinois.