Uni-Select to be acquired by LKQ for $2.1bn

May 2023 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

May 2023 Issue

In an attempt to tap into the aftermarket auto parts business, North America’s largest provider of alternative collision auto parts LKQ Corporation is to acquire Canada-based Uni-Select Inc. in an all-cash deal valued at approximately C$2.8bn.

Under the terms of the definitive agreement, LKQ will acquire Uni-Select’s issued and outstanding shares for C$48 per share in cash. The transaction is not subject to a financing condition.

“This acquisition further enhances LKQ’s global automotive vehicle parts distribution business,” said Dominick Zarcone, president and chief executive of LKQ Corporation. “Uni-Select’s North American automotive refinish paint and mechanical parts distribution operations complement LKQ’s existing footprint and will allow us to distribute a broader array of products to our customers.

“We look forward to welcoming Uni-Select’s employees to the LKQ team,” he continued. “Importantly, we believe that our combined efforts will create tremendous long-term value for our customers, shareholders, employees and other stakeholders as we continue to focus on our operational excellence initiatives.”

A leading provider of alternative and specialty parts to repair and accessorise automobiles and other vehicles, LKQ has operations in North America, Europe and Taiwan. The company offers its customers a broad range of original equipment manufacturer (OEM) recycled and aftermarket parts, replacement systems, components, equipment and services to repair and accessorise automobiles, trucks and recreational and performance vehicles.

“The transaction offers compelling value and liquidity to our shareholders and is the culmination of the efforts by our dedicated team to improve our operations and drive efficiencies with a focus on excellent customer service,” said Brian McManus, executive chair and chief executive of Uni-Select. “We see great opportunities to benefit our customers, employees, suppliers and brands by combining our complementary strengths within the larger, multi-disciplinary and growing LKQ team.”

Moreover, after consultation with its outside financial and legal advisers and after receipt of the unanimous recommendation of a special committee of the board of directors, the Uni-Select board of directors has unanimously approved the transaction and unanimously recommends that Uni-Select shareholders also vote in favour.

Headquartered in Québec and with over 5200 employees in Canada, the US and the UK, Uni-Select is a leader in the distribution of automotive refinish and industrial coatings and related products in North America, as well as a leader in the automotive aftermarket parts business in Canada and in the UK.

Acting as financial advisers to KKQ are BofA Securities and Wells Fargo Securities, with Wachtell, Lipton, Rosen & Katz, Davies Ward Phillips & Vineberg LLP and Slaughter and May acting as legal counsel. For Uni-Select, TD Securities is acting as exclusive financial adviser, with Fasken Martineau DuMoulin LLP, Latham & Watkins and Linklaters acting as legal counsel.

The transaction is expected to close in the second half of 2023, subject to customary conditions, including the receipt of anti-trust clearances in Canada, the US and the UK, approval under the Investment Canada Act, Uni-Select shareholder approval and court approval.

Mr Zarcone concluded: “We are pleased that the acquisition will allow LKQ to build a significant presence in Québec, including Uni-Select’s Boucherville, Québec head office, expanding upon LKQ’s already existing business operations in that province.”

Fraser Tennant