LKQ says it has signed a definitive agreement to acquire Pittsburgh Glass Works (PGW) from private equity firm, Kohlberg & Company and PPG Industries (PPG), for an enterprise value of US$635m.
PGW is a global distributor and manufacturer of automotive glass products. PGW’s business comprises wholesale and retail distribution services, automotive glass manufacturing and retailer alliance partnerships.
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PGW operates around 120 distribution branches serving more than 7,000 automotive glass retailer shops across North America. In addition, PGW operates 12 automotive glass fabrication facilities in North America, Europe and China.
The transaction is expected to be completed in the second quarter of 2016 and is subject to customary closing conditions and necessary regulatory approvals.
“We are excited to be partnering with PGW and look forward to working with the existing core management team at PGW to continue to invest in and grow its business while continuing service to all its customers,” said LKQ president and CEO, Robert Wagman.
“PGW reflects LKQ’s commitment to provide a one-stop-shop solution to the North American collision repair industry by adding automotive glass to our product offerings.
“PGW is the largest pure-play provider in the US$3.5bn North American automotive glass market. This acquisition will expand our addressable market in North America and globally and simultaneously offers tremendous distribution synergy opportunities with our existing network.”
PGW’s revenue for the twelve months ended October 31, 2015 was US$1.07bn and LKQ expects the transaction to be accretive to its earnings in 2016. These projected results exclude restructuring and acquisition-related expenses.
The company intends to finance the acquisition with borrowings under its revolving credit facility.
As of 25 February, the company had around US$2.2bn of available borrowing capacity on its credit facility.
