LKQ Corp. has announced that it has signed a definitive agreement to acquire the holding company of Rhiag-Inter Auto Parts Italia S.p.A, the European business-to-business distributor of aftermarket spare parts for passenger cars and commercial vehicles.
The sales price is given as €1.04 billion. Rhiag has operations in Italy, Czech Republic, Switzerland, Hungary, Romania, Ukraine, Bulgaria, Slovakia, Poland and Spain and operates through 247 distribution centres and 10 warehouses. The company says that it serves more than 100,000 professional clients.
The transaction is expected to be complete early in the second quarter of 2016 regulatory approvals.
“Rhiag is expanding our market with the addition of 10 new countries to our European footprint,” said Robert Wagman, President and CEO of LKQ Corp. “Rhiag has a strong market position in Italy and the Czech Republic and experienced management teams in their respective markets. Clearly this acquisition will accelerate our strategy of creating a Pan-European aftermarket mechanical parts distribution business in this highly fragmented €188 billion wholesale DIFM market.”
Luca Zacchetti, Rhiag Group CEO, commented, “I believe that, combined with LKQ, Rhiag Group will be in an even stronger position to deliver its superior service level to customers across Europe. I am committed to pursuing our existing strategic goal of profitable market share growth.”
Rhiag’s revenue for the 12 months ended September 30, 2015 was approximately €882 million and LKQ expects the transaction to be accretive to its earnings in 2016. These projected results exclude restructuring and acquisition related expenses.
Sukhpal Singh Ahluwalia, LKQ Corp. board member and Chairman of its UK subsidiary, Euro Car Parts, added, “I have long admired Rhiag’s impressive track record of growth and strong distribution network. We have numerous common suppliers, and I have worked closely with many of them for more than 30 years. I am confident that together with Rhiag we will make our supplier relationships even stronger.”