LKQ buying Stahlgruber's European auto parts business

CHICAGO — Auto parts distributor LKQ Corp. is buying Stahlgruber G.m.b.H. of Poing, Germany, in a deal that will yield a pan-European parts distributor with estimated annual sales of $5 billion.

The deal, expected to close late in the first quarter or early in the second quarter of 2018, does not include REMA Tip Top A.G., a sister company that specializes in transport belting and tire repair materials and equipment.

The LKQ-Stahlgruber deal is valued at about $1.75 billion, Chicago-based LKQ said, and comprises operations in Austria, Croatia, Czech Republic, Germany, Italy and Slovenia along with sales activities in Switzerland.

Stahlgruber's assets include 228 sales centers, six warehouses and a 1.38-million-sq.-ft. logistics center in Germany serving more than 100,000 customers with over 500,000 SKUs.

"This transformative acquisition solidifies LKQ as a leading Pan-European aftermarket mechanical parts distributor, and further enhances our global diversification strategy," said LKQ President and CEO Dominick Zarcone, who noted that Stahlgruber has a history of delivering above-market growth.

"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," he added.

Heinz Reiner Reiff, CEO Stahlgruber Otto Gruber A.G., said, "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."

LKQ said it 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 8.1 million newly issued shares of LKQ common stock.

Poing-based REMA Tip Top IP TOP operates through more than 150 national subsidiaries worldwide, generating more than $1 billion in annual revenue with over 6,300 employees. It's represented in North America by REMA Tip Top North America Inc. of Northvale, N.J.