Euro Car Parts sold to LKQ Corporation in £225 million deal
LKQ Corporation, purportedly the largest provider of aftermarket and recycled collision replacement parts in the US and Canada, has acquired Euro Car Parts. The initial purchase price was £225 million, however in addition the purchase agreement provides for the price to increase by a further £55 million if Euro Car Parts meets certain growth targets.
Sukhpal Singh Ahluwalia, chairman and managing director of Euro Car Parts, commented: “LKQ Corporation is arguably the most dynamic and successful company in the North American automotive aftermarket for collision parts. They have a dedicated and focused management team which has built an innovative company with a very strong work ethic. We feel very much in tune with this culture and with our new colleagues, all of whom have many years of experience in this business.”
LKQ Corporation has made over 120 acquisitions, large and small, during the past 14 years and with great success. Euro Car Parts is their second largest acquisition ever. It is also the company’s first outside North America.
LKQ Corporation’s approach is said to be “to back existing management teams and to help them realise their market potential.”
According to Sukhpal Singh Ahluwalia himself, Euro Car Parts’ chairman is retaining “a substantial financial interest” and all of the board directors have indicated their intention to remain. Therefore there will be no changes or additions to the team which was recently awarded the accolade of ‘Best UK Management Team 2011’ in The Sunday Times Profit Track 100.
The new partnership with LKQ Corporation is intended to help the Euro Car Parts team continue its expansion in the UK parts aftermarket. Over the past 12 months, Euro Car Parts has opened a brand-new 500,000 square foot National Distribution Centre, nine Regional Hubs and many new branches. Sales and profits grew substantially in the first 6 months of 2011 compared with the previous year, at a time when some competitors were slipping backwards.
LKQ Corporation, Robert Wagman, president and co-CEO, added: “The acquisition of Euro Car Parts represents an important strategic step for LKQ Corporation. It has always been our goal to acquire the best companies in their respective markets. Euro Car Parts represents that type of a company in the UK market with its impressive track record of growth, excellent distribution network and strong management. Euro Car Parts provides an ideal launching point for our European entry. With this acquisition we will work with Euro Car Parts’ customers and suppliers to expand the use of alternative automotive parts in the UK.”