If you run a dealership — an independent operation or especially a franchised store — and you haven’t already been a buyer on Copart’s platform, Jay Adair wants that situation to change as soon as his company’s $1.9 billion acquisition of ACV Auctions closes and the wholesale enterprises synergize.

The Copart chief executive officer elaborated about that goal late Thursday afternoon after announcing the all-cash acquisition that management is looking to close by the end of the year.

“It’s roughly a quarter of our volume today,” Adair said about the amount of whole, functioning cars that go through Copart’s system with much of the remainder being salvage and damaged vehicles from its insurance-company clients. “So given that, I think we’ve been very successful.

“But to get into those franchise dealers and get into the higher-end trades, I think does take a different product, and ACV is a different product than Copart,” Adair continued. “The way they inventory the vehicle all the way through to the condition report, it is different. So, I think this opens up the world and our ability to do a lot more vehicles in that space.”

In a news release, Copart highlighted the combined company will participate across the vehicle lifecycle, from dealer trade-ins and wholesale remarketing to salvage disposition and international resale.

Copart and ACV said that together they will have one of the industry’s largest vehicle condition datasets, allowing the combined company to deliver better experiences across its customer base.

Furthermore, the news release noted that Copart and ACV can generate significant commercial opportunities with an expanded portfolio.

ACV’s complementary position in the dealer-to-dealer auction channel will create strong growth opportunities for the combined company, including cross-selling buyers and sellers and expanding transportation services and commercial vehicle operations.

Adair sees each customer being served well. Dealers will have more options of vehicles that fit their inventory needs. Insurance companies will have more buyers considering the units written off as a total loss.

“As we bring in more independent dealers, more franchise dealers, as we bring in more of those buyers, that will improve returns, especially when you start to look at insurance-damaged vehicles,” Adair said. “More often than not now, you’re seeing cars that don’t look like they should have been totaled, but they’re economic totals.

“While they’re still drivable, while they’re repairable, they’re economically totals, so that’s going to help on that front,” Adair continued.

And if dealerships take in an especially rough trade they would rather not try to retail, “our international buyers, especially Mexico, just love those vehicles,” Adair said.

Later in the call, Adair added, “Think about every car that is not damaged or lightly damaged is going to be put in front of thousands of dealers. I mean, that alone gets me excited.”

Foundation for success

Adair opened the Q&A segment of Thursday’s conference call by describing why ACV and chief executive officer George Chamoun are not strangers to Copart.

“George and I have gotten to know each other really well, as well as many of his senior team,” Adair said. “They really have a startup mentality in the way they run the company. They think very agile, as non-corporate 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,” Adair continued. We’re about winning. They’re about results. They’re about culture, and I think we’re just going to get along great. We’re going to put these two companies together, and it’s going to be amazing.

Following the close of the transaction, ACV will operate as an independent subsidiary of Copart led by ACV’s existing leadership team, according to the news release.

“They’re going to be separate brands, but they will be integrated on some level between buyers and experiences, that kind of thing. But again, separate websites, separately operating,” Adair said.

Beyond the $1.9 billion purchase price, Copart is prepared to make additional expenditures to make the ACV acquisition come to fruition the way Adair is seeking.

“Some of the investment is going to be in training,” Adair said. “We’ve got to bring the ACV folks up to speed on what Copart can do and what offerings we have, and we’ve got to do the same thing for Copart. We’ve got to bring some of the Copart folks up to speed on what ACV products and services are.

“There is a buzz at Copart right now about all that we’re accomplishing,” he added.

Could more acquisitions be ahead?

As of July 31, Copart reported that it had more than $10 billion in total assets on its balance sheet.

Copart said through the news release that intends to fund the ACV transaction through cash on hand, maintaining sufficient balance sheet flexibility to continue pursuing organic and inorganic investments.

Copart added that the transaction also is not subject to any financing condition.

So, is Copart out of acquisition ammunition having made this deal for ACV?

“I don’t think this prohibits us from doing any future acquisitions. We’re looking at other businesses that we may want to acquire in the auction space. So, you know, we’ve got a lot of options,” Adair said.

“Even with this deal done, we’ve got over $2 billion of cash on our balance sheet, so 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,” he went on to say.