LKQ to buy European spare parts supplier Rhiag in 11 billion deal

(Reuters) -- U.S. after-market provider LKQ Corp. said today it'd purchase Italy's Rhiag-Inter Autoparts Italia SpA, possessed by private-equity company Apax Partners LLP, to grow in the European automobile spare parts marketplace.
The offer, valued at 1.04 billion euros ($1.14 billion) on an enterprise foundation, will give LKQ accessibility to Italy, Czech Republic, Switzerland, Hungary, Romania, Ukraine, Bulgaria, Slovakia, Poland and Spain.
It's going to assist the organization tap a "very-fragmented 188 billion-euro wholesale DIFM (Do It-For-Me) marketplace," CEO Robert Wagman stated. Europe accounted for over a quarter of LKQ's gross income in 2014.
Merger and acquisition activity in the aftermarket auto-parts business is picking up as customers opt to fix their vehicles as an alternative to purchasing new ones.
Japanese tire manufacturer Bridgestone Corp and billionaire investor Carl Icahn are locked in a struggle for U.S. auto-parts retailer Pep Boys-Manny, Moe & Jack.
Advance Auto-Parts Inc is also apparently investigating a deal after being approached by at least one potential suitor.
Rhiag, whose competitors include Mekonomen AB in the Nordic area and Inter Cars SA in Poland, had sales of about 882 million euros in the year ended Sept. 30.
Reuters noted only in July that Apax, which purchased Rhiag in 2013 for an undisclosed sum, was investigating a list or sale of the Italian firm.
The LKQ Rhiag offer is likely to be finished in the 2nd quarter of 2016.
LKQ stated it intended to fund the offer, which will increase its net profits from 2016, through its revolving credit facility plus it could likewise take on Rhiag's debt.
LKQ sells utilized, recycled and re-manufactured car components, including engines and transmissions. A year ago the business managed more than 570 services, recording $6.74 billion in sales and net earnings of $381.5 million. The mixture with Rhiag would improve earnings to $8 billion.
The Chicago-based firm was formed in 1998 and has developed worldwide through over 200 200 acquisitions since then, according to its web site.
Through the initial nine months, LKQ mentioned it posted net earnings of $328 million on sales of $5.4 billion, up from net net gain of $301 million on sales of just over $5 billion during the same period last year.
Shares in LKQ increased 5 percent to close at $28.84 today.
BofA Merrill Lynch was LKQ's financial advisor for the offer and JP Morgan and UBS proposed Apax and Rhiag.
Crain's Chicago Business and Automotive Information contributed to the report.
Contact Automotive News

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Aftermarket
Amalgamations - Acquisitions - Takeovers
Europe

Marketing

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22.12.2015
ID:3438

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