Keystone Bought by LKQ for $811 Million

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LKQ Corp. said Tuesday that it is buying Keystone Automotive Industries Inc. for about $811 million in cash, in a move to expand its presence in the distribution of auto replacement parts.


Chicago-based LKQ, which recycles parts from damaged cars, will pay $48 per share for the Pomona-based generic auto collision repair parts distributor, a 10 percent premium to Keystone’s closing price of $43.61 on Monday.


“This acquisition is a natural progression of our strategy to expand our presence in the distribution of automotive replacement parts, an industry we estimate to be over $188 billion in size,” LKQ President and Chief Executive Joe Holsten said in a statement.


The deal is expected to close in the fourth quarter and is subject to approval from Keystone shareholders and regulators. Keystone’s board unanimously recommended shareholders approve the acquisition.


In 2006, LKQ reported profit of $44 million on sales of $789 million. Keystone in May reported fiscal 2007 profits of $30 million on sales of $714 million. Profits at Keystone have more than doubled in the past three years.


Shares in Keystone gained more than $3.19, or 7.3 percent, to $46.80 in afternoon trading on the Nasdaq. Shares in Keystone have gained more than 45 percent so far this year.

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