Copart to acquire ACV, CEO says international vehicle purchases expansion will continue

Copart announced plans on Sept. 10 to acquire ACV, a digital automotive marketplace and data services partner for dealers and commercial clients, for $1.9 billion in cash.

Copart said it will complete the transaction by purchasing all of ACV’s outstanding common stock for $10.50 per share.

A Copart press release states that the per-share purchase price represents a 45% premium to ACV’s unaffected closing stock price on Aug. 10, the last trading day before published media reports regarding a potential transaction involving ACV, and a 41% premium to ACV’s 30-day volume-weighted average price for the period ending Sept. 9.

Copart Chairman and CEO Jay Adair discussed the acquisition during the company’s Sept. 10 Q4 fiscal 2026 earnings call with investors.

“We are excited about using our locations as staging areas for their vehicles and combining our global buyer base with their digital marketplace and remarketing technology,” Adair said. “Copart and ACV are highly complementary. We bring physical scale, deep institutional relationships, salvage expertise, and international buyer demand with more than 275 locations, over 4 million vehicles sold a year, and approximately 1 million members across more than 185 countries.

“ACV brings dealer liquidity, relationships, and inspections and valuation technology, transacting approximately $10 billion of gross merchandise value in 2025 across more than 22,000 active buyers. Together, Copart and ACV create a more complete automotive marketplace — connecting the right vehicle to the right buyer through the right channel without forcing every vehicle into a single operating model.”

He added that the companies expect the transaction to be accretive to earnings in the first full year. The boards of both companies have unanimously approved the transaction, and closing is slated for year-end, Adair said.

ACV will operate as an independent subsidiary led by its existing team.

During the Q&A portion of the call, Adair was asked to talk about how ACV fits into Copart’s culture.

“They have a startup mentality [in] the way they run the company,” Adair replied. “They think very agile… and I would say as non-large public company as you can get. They think scrappy, like we do, and you’ve heard me use those terms in the past. We are a very scrappy company that can make decisions very quickly, and they have very much that same culture.

“Additionally, I’d say there’s a friendship culture that they have. We’re all friends in this company. We get along. I mean, we don’t just get along; we hang out together, so it’s one of those things where we’re all pretty chummy. I noticed that with them as well, so they’re going to fit in perfect. We’re about winning. They’re about results-driven culture, and I think we’re just going to get along great.”

Adair said both brands will be maintained. He added that the companies will integrate buyer liquidity for availability on both platforms, but their product marketing will be separate for each brand.

“They’ll be selling those cars on that website separately from Copart,” Adair said. “They’ll be utilizing the logistics of Copart. We can move a vehicle anywhere in the country in less than 24 hours, and we do it sometimes over 15 to 20,000 times a day. There’s a bunch that we bring to the table, but there’s also a bunch that they bring to the table with their technology and their buyer base.”

When asked whether the ACV acquisition will affect future Copart mergers and acquisitions, Adair said he doesn’t expect it to.

“I don’t think this prohibits us from doing any future acquisitions,” Adair said. “We’re looking at other businesses that we may want to acquire in the auction space, so we’ve got a lot of options. Even with this deal done, we’ve got over $2 billion of cash on our balance sheet. I think we’re in a great spot. What really matters to me is that we buy companies that make sense, that fit in with Copart, and that Copart can add a lot of value.

“In this case, this is going to be a sharing of customers, sharing of buyers. Remember, we do a bunch of wholesale today already, so a bunch of the customers that are with ACV are with Copart… ACV’s got a logistics engine internally that they’ve developed as well. There’s a lot of benefit here. If there’s something in the future that has similar benefit, we’ll look at it.”

Another investor asked if Copart could expand a vehicle repossession business with the new ACV relationship given the bank relationships ACV may have.

“We didn’t buy a repo business. We’re not repossessing cars,” Adair replied. “We love selling repos. I don’t think I want to be the guy on television that picks the car up at someone’s house, so I don’t think we want to actually do the repo, but we love selling repos. We love picking them up from the repo lots and then auctioning them off. We’re going to focus heavily on that.”

As for Copart’s overall focus, Adair began the call by saying the company will continue expanding its international vehicle purchases from insurance companies to sell at auction.

“We’ll continue to focus on whole car expansion domestically, and then we’ll continue to invest in technology and services that assist all of our customers,” he said. “And then in the spirit of acting like a startup, we are very fast. We’re moving very quickly, and we’re bringing products and services to market in quarters, not in years. We expect to have some of that coming out in the next four quarters.”

Adair said Q4 fiscal year 2026 collision claim frequency was down 3.4% year over year, noting that as “a moderation from a high of single-digit declines through 2025.” Total loss frequency reached 23.3% in Q2 2026, the highest second quarter on record, up from 22.4% in Q2 2025, he said.

“Average collision severity was over $6,300 per claim, up nearly 8.8% year over year, [the] fastest in more than three years and the fourth straight quarter of acceleration,” Adair said. “Repair costs are up more than 50% from 2019 levels, per data from CCC. Looking at rental car rates, and it’s something that obviously costs or increases the cost of repair for insurers, that rose by 4.5% year over year.”

He added that Copart believes total loss frequency will continue to rise because of increasing vehicle repair complexity as added technologies make vehicles more and more like “computers on wheels.”

Adair also noted that vehicle miles traveled were up 0.27% year over year in Q4 2026 and vehicles in operation, i.e., the car parc, increased 1.6% year over year in calendar Q2 2026. Insurance average selling prices were up globally by 3.1% year over year in Q4 2026, up 3.7% domestically, and up 3.3% internationally, he said.

In Q4 2026, Copart was outpacing the Manheim Used Vehicle Value Index, which was up 2.8% year over year, according to Adair. Lastly, he stated that vehicles Copart sold in the U.S. to international buyers represented 38.2% of vehicles sold in fiscal year 2026.

Copart’s operating costs per car in Q4 fiscal year 2026 versus the same quarter last year increased by 12.7%, Adair said.

“We are going to be working towards reducing our costs on a per-car basis,” he said. “[F]ocusing on the cost, that’s going to be one piece of it. The other side is, as we bring more units through, we’re going to leverage those costs through more units. I fully anticipate per-car cost to go down.”

Leah Stearns, senior vice president and chief financial officer, added that Copart’s performance “continues to reflect the investments we are making in complementary products and services.”

“This includes title express for insurance customers, long haul delivery for our members, and dedicated wholesale facilities for our dealer and commercial sellers,” she said. “Today, we have 25 dedicated wholesale facilities co-located at existing Copart locations in the top U.S. metro markets, which serve 80% of the addressable wholesale market. Our investments to date have included facility upgrades, the hiring of skilled technicians, and the implementation of technology capabilities to serve this segment of our customers at a superior level.”

For the three months ended July 31, Copart said its revenue, gross profit, and net income were $1.2 billion, $481.4 million, and $327.4 million, respectively.

“These represent an increase in revenue of $27.3 million, or 2.4%; a decrease in gross profit of $28.3 million, or (5.5)%; and a decrease in net income attributable to Copart, Inc. of $68.9 million, or (17.4)%, respectively, from the same period last year,” an earnings press release states. “Fully diluted earnings per share for the three months ended July 31, 2026 declined to $0.35 compared to $0.41 last year, or (14.6)%.”

For the full fiscal year, Copart’s revenue increased $19.3 million, or 0.4%; gross profit decreased $15.8 million, or (0.8)%; and net income decreased by $68.2 million, or (4.4)% compared to fiscal year 2025, according to the release.

Images

Featured image: An aerial photo of a Copart auction site in Texas. (Provided by Copart)