LKQ Corporation to acquire Stahlgruber GmbH for €1.5 billion

German aftermarket car parts and tools distributor Stahlgruber GmbH will soon have a new owner. LKQ Corporation has entered into a definitive agreement with Stahlgruber group management holding company Stahlgruber Otto Gruber AG to acquire the subsidiary for an enterprise value of approximately 1.5 billion euros. LKQ expects to complete the transaction late in the first quarter or early in the second quarter of 2018, subject to required regulatory approvals.

The acquisition covers Stahlgruber operations in Germany, Austria, the Czech Republic, Italy, Slovenia, and Croatia. Stahlgruber’s facilities include 228 sales centers, six warehouses, and an approximately 128,000 square metre advanced logistics centre located in Germany that serves more than 100,000 professional clients and offers over 500,000 SKUs.

Upon the transaction’s closure, Stahlgruber will belong to a company that achieved revenue of US$8.58 billion in 2016 and whose operations include Euro Car Parts in the UK. LKQ Corporation acquired Euro Car Parts in 2011 for £225 million. At the time, the deal was LKQ Corporation’s second-largest acquisition ever and its first outside North America. In 2016, the Euro Car Parts subsidiary acquired the business assets of UK automotive parts distributor Andrew Page Limited, including its 102 branch locations, national distribution centre and corporate office.

“This transformative acquisition solidifies LKQ as a leading Pan-European aftermarket mechanical parts distributor, and further enhances our global diversification strategy,” states Dominick Zarcone, president and chief executive officer of LKQ Corporation. “Stahlgruber has a history of delivering above-market growth and its stellar industry reputation is an ideal fit with our culture; we are extremely proud to welcome the approximately 6,600 Stahlgruber employees to the LKQ family. Importantly, we believe that our combined efforts will create tremendous long-term value for our customers and stockholders and growth opportunities for our collective team members.”

“Stahlgruber will create a contiguous footprint and serve as an additional strategic hub for our European operations, allowing for continued improvement in procurement, logistics and infrastructure optimisation,” adds John S. Quinn, chief executive officer and managing director of LKQ Europe. “The LKQ Europe management team and I look forward to working with Stahlgruber’s management team and leveraging our combined best practices to maximise the benefits of scale across the continent.”

Heinz Reiner Reiff, chief executive officer of Stahlgruber Otto Gruber AG, comments: “This combination is a natural fit for both LKQ and Stahlgruber. I am very excited about the meaningful benefits that will occur by combining our complementary cultures and industry leading management, which together position Stahlgruber to achieve the continued growth of its European businesses. Our acceptance of LKQ shares as part of the consideration emphasises our belief in the value of this combination.”

Stahlgruber’s 2017 annual revenue is estimated to be approximately 1.6 billion euro. LKQ expects the transaction to be accretive to its adjusted diluted earnings per share during the first year after the closing. These projected results exclude amortization of acquired intangibles, restructuring and acquisition related expenses.

LKQ intends to finance the acquisition with the proceeds from planned debt offerings, borrowings under its existing revolving credit facility and the direct issuance to Stahlgruber’s owner of 8,055,569 newly issued shares of LKQ common stock. As of 1 December 2017, LKQ had approximately US$1.4 billion of available borrowing capacity under its recently amended credit facility.

Bank of America Merrill Lynch and Credit Suisse are acting as financial advisors, Baker McKenzie (Germany) is acting as M&A counsel, and K&L Gates (Chicago) is acting as U.S. securities counsel, to LKQ Corporation. Deutsche Bank is serving as the exclusive financial advisor, and Hengeler Mueller is providing legal counsel to Stahlgruber’s owner.

Comments
Comments closed

We see you are visiting us from China.

If you would like the latest news from the Chinese tyre industry in Chinese, visit our partner site TyrepressChina.com. Or click below to continue on Tyrepress.