This article first appeared on GuruFocus.
ACV Auctions Inc. (ACVA, Financials), the digital marketplace for wholesale vehicle sales, surged about 44% Friday after Copart agreed to buy the company for roughly $1.9 billion in cash.
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Copart will pay $10.50 per share. That represents about a 45% premium to ACV's unaffected closing price before reports of a possible transaction surfaced.
The deal gives Copart a much bigger position in dealer-to-dealer vehicle remarketing.
ACV operates a digital wholesale marketplace that connects dealers and commercial sellers, adding a different business to Copart's traditional focus on salvage and vehicle auctions.
Copart expects the combination to create revenue and cost synergies across dealer, commercial and retail channels.
Management also expects the transaction to be neutral to earnings per share in the first full year after closing and accretive beginning in fiscal 2028.
Copart plans to fund the acquisition with cash on hand, and the deal is expected to close by the end of 2026.
For investors, most of ACV's immediate upside has now been captured by the takeover price. The more important question shifts to Copart: whether the acquisition can expand growth without weakening returns as it moves further into wholesale vehicle remarketing.