07/20/2015

LKQ Buys PartsChannel, In Deal For Coast Distribution

Source: Automotive Week (The Greensheet)

Chicago-based LKQ Corp. has acquired substantially all of the assets of PartsChannel Inc., an aftermarket collision parts distributor with 14 warehouses servicing over 30 markets across the United States. Terms of the PartsChannel transaction have not been disclosed.

“PartsChannel presents attractive synergies within our existing network, while simultaneously adding some new geographic locations to our North American aftermarket collision parts business,” said Robert Wagman, president and CEO of LKQ.

LKQ also has reached a definitive agreement to acquire The Coast Distribution System, a leading distributor of replacement parts, supplies and accessories for RVs, primarily to retail parts and supplies stores, service and repair establishments, and new and used RV dealers in North America.

The deal calls for a subsidiary of LKQ to commence a tender offer to buy all outstanding shares of Coast’s common stock for $5.50 per share in cash. Consummation of the offer is subject to satisfaction of customary conditions, including that the holders of at least a majority of Coast’s outstanding shares accept the offer. Any shares not tendered in the offer will be acquired, following consummation of the tender offer, in a second-step merger at the same cash price as in the tender offer.

Coast’s board of directors has unanimously recommended that Coast stockholders accept the offer and tender their shares. Total cash consideration payable for Coast’s outstanding shares is roughly $29 million. As of June 30, Coast had $19.50 million outstanding under its long-term revolving bank line of credit.

The Coast acquisition is expected to close in the third quarter.

“The combination of Coast with our specialty segment and RV business presents tremendous distribution and logistics synergies with our existing network, and expands our RV business with the addition of unique product offerings and brands,” Wagman said.

Last year, LKQ subsidiaries Keystone Automotive Operations and NTP Distribution acquired Stag-Parkway, a large distributor of specialty parts to the recreational vehicle market in the United States and Canada.

LKQ is a large provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. The company has operations in North America, the United Kingdom, the Netherlands, Belgium, France, Scandinavia, Australia and Taiwan. Aside from the businesses noted above, LKQ also owns Euro Car Parts (ECP), a large distributor of automotive aftermarket parts in Europe.