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Universal Salvage approves £57m sale offer

Vehicle salvage and auction services firm Universal Salvage has agreed terms of a recommended cash offer for the group from Copart worth £57m, it said in a statement this morning.

Copart, which provides salvage vehicle sales services in the US, won over Universal’s bosses with a 200p per share offer, a premium of more than 6% to last night’s closing price.

It provides vehicle suppliers, primarily insurance companies, with a range of services to process and sell salvage vehicles over the internet through its VB2 Internet auction-style sales technology. In February, Universal said it had terminated talks regarding a possible 200p per share offer for the group just two weeks after saying it had received a preliminary approach regarding a potential cash offer.

Copart has received undertakings to vote in favour of the scheme and approve the resolution to be proposed at the EGM from Universal Salvage shareholders representing around 53% of the group.

Copart president Jayson Adair said: "This will allow Copart to expand its operations into the UK and the combination of both businesses will allow us to provide an improved service to our customers."

Bedfordshire-based Universal Salvage, which scraps written-off cars and auctions damaged vehicles bought from insurance companies, in February reported a pre-tax profit of £900,000 for the six months to end-October on turnover up 28% at £32.6m.

Copart, which auctions wrecked cars for insurers, in March posted a rise in second quarter earnings per share from continuing operations to $0.32 (16 pence) from $0.28 the year before as revenue grew to $128.9m (£65.3m) from $125.1m (£63.4m).

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