Published on December 10, 2013

LKQ to acquire Keystone Automotive operations

CHICAGO (Dec. 10, 2013) — Parts distributor LKQ Corp. has agreed to acquire aftermarket parts and accessories distributor Keystone Automotive Operations Inc. for $450 million.

The deal is expected to be completed in the first quarter of 2014 and is subject to customary closing conditions and necessary regulatory approvals, LKQ said.

Established in 1971, Keystone has more than 1,500 employees with 25 locations serving more than 20,000 specialty retailers and equipment installers throughout North America.

The company offers a product line of over 300,000 SKUs from more than 800 suppliers. Keystone markets products to serve the truck and off-road, speed and performance, recreational vehicle, towing, wheels, tires and performance handling and miscellaneous accessories segments.

“LKQ will become a leading player in the specialty aftermarket equipment and accessories business with this acquisition,” said Robert L. Wagman, LKQ President and ceo. “In addition, our addressable market opportunity in North America will be significantly expanded.

“The entire specialty aftermarket equipment and accessories industry is a highly fragmented $31 billion market, and Keystone’s current product categories represent about $5 billion of the industry.”

LKQ said it expects the transaction to be accretive to its earnings in 2014. Keystone’s revenue for 2014 is expected to be approximately $700 million with an EBITDA margin of approximately 10 percent. The projected results, according to LKQ, exclude restructuring and acquisition-related expenses.

The company also said it intends to finance the acquisition with borrowings on its revolving credit facility and asset securitization program. As of Sept. 30, LKQ had approximately $1.2 billion available from these sources.

LKQ hosted a conference call on Dec. 6 with members of senior management to discuss the pending Keystone acquisition. An audio webcast of the call is available on the company's website www.lkqcorp.com in the Investor Relations section. A replay of the conference call is available by calling 877-660-6853 or 201-612-7415 for international calls. The phone replay requires the conference ID of 424881# be used to access the call. Both formats of replay are available through Dec. 27.

LKQ is a distributor of alternative collision vehicle replacement parts and a provider of recycled engines and transmissions and remanufactured engines. The company has operations in the United Kingdom, Canada, Mexico, Taiwan, the Netherlands, Belgium, France, Guatemala and Costa Rica and operates more than 500 facilities offering a broad range of replacement systems, components and parts to repair automobiles and light, medium and heavy-duty trucks.

Keystone distributes and markets specialty aftermarket automotive equipment and accessories in North America. It has 25 locations serving more than 20,000 specialty retailers and equipment installers throughout North America.

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