LKQ Expands in Europe With Stahlgruber Buy

The auto parts retailer is the No. 1 distributor in Europe but rival Genuine Parts has been moving into that territory.
Matthew HellerDecember 11, 2017

U.S. auto parts retailer LKQ Corp. is buying German wholesaler Stahlgruber GmbH for about 1.5 billion euros ($1.8 billion) in a move to cement its dominance in Europe.

Stahlgruber is a wholesale distributor of car replacement parts, tools and other accessories, complementing LKQ’s portfolio of vehicle engines, axles and wheels. It operates in Germany, Austria, the Czech Republic, Italy, Slovenia, and Croatia.

The acquisition follows LKQ rival Genuine Parts’ foray into Europe with a $2 billion deal to buy Alliance Automotive Group. LKQ is the No.1 parts distributor by billings in Europe’s roughly 68-billion-euro light vehicle aftermarket.

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“This transformative acquisition solidifies LKQ as a leading Pan-European aftermarket mechanical parts distributor, and further enhances our global diversification strategy,” Dominick Zarcone, LKQ’s chief executive, said in a news release.

“Stahlgruber has a history of delivering above-market growth and its stellar industry reputation is an ideal fit with our culture,” he added.

As Reuters reports, Chicago-based LKQ has expanded in Europe mainly through acquisitions and most recently bought Rhiag-Inter Auto Parts Italia S.p.A for $1.1 billion two years ago, adding 10 new countries to its network.

The purchase of Stahlgruber values the company at 11.9 times its 2017 EBITDA, a source told Reuters — in line with LKQ’s own valuation, but at a discount to Genuine Parts’ valuation, which is at 13.2 times EBITDA.

Stahlgruber’s facilities include 228 sales centers, six warehouses, and an approximately 128,000 square meter advanced logistics center in Germany. Its 2017 revenue is expected to be 2017 about 1.6 billion euros, up from 1.5 billion euros the previous year.

“This combination is a natural fit for both LKQ and Stahlgruber,” Heinz Reiner Reiff, CEO of Stahlgruber’s parent company, said. “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.”

Before the Rhiag deal, LKQ’s European footprint had been limited to Belgium, France, the Netherlands, Scandinavian countries, and the United Kingdom.