A US-based supplier of recycled and aftermarket auto parts, LKQ Corporation has found its way in merging with Keystone Automotive Industries, Inc. as part of its expansion strategies.

Merging has been seen as a good strategy to expand the business and will also result to better market presence for the LKQ Corporation. The aftermarket parts supplier has only signed a definitive merger agreement in order to acquire Keystone, which is an aftermarket collision replacement parts provider.

The agreement, however, is still going through the process of approval from the shareholders and other important customary conditions. Although the merging is still under negotiation, Keystone’s Board of Directors has unanimously recommended Keystone shareholders approve the merges, thus LKQ-Keystone is expected to close in towards the end of the year. With the two of the giants in the booming aftermarket parts industry, the transaction has been also expected to generate an encompassing alternative replacement parts business. These two companies have a combined earnings of approximately $1.5 billion and also a North American network of more than 260 branches in the US and Canada.

“LKQ and Keystone are a great strategic fit and this acquisition is a natural progression of our strategy to expand our presence in the distribution of automotive replacement parts, an industry that we estimate to be over $188 billion in size,” said Joe Holsten, president and CEO of LKQ.

In Canada alone, Keystone Automotive Industries has about 11 service locations and uniting with LKQ will make it even a more comprehensive aftermarket parts supplier.

“In addition to providing tremendous value to our shareholders, this transaction delivers a true combination of complementary strengths. Keystone’s aftermarket product offerings are a perfect fit with LKQ’s leading presence in the recycled parts business. The Keystone-LKQ merger presents unique opportunities to provide a comprehensive program of aftermarket, remanufactured and recycled parts to our customers, and we look forward to realizing these opportunities,” said Keystone president and CEO Rick Keister.

Lastly the merger is seen to improve availability of aftermarket parts in the repair process.

This entry was posted on Wednesday, July 25th, 2007 at 12:43 am and is filed under Aftermarket parts news, Aftermarket parts community. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.