American automotive parts manufacturer LKQ Corp. (LKQ) has agreed to buy Quebec-based Uni-Select (UNS) for $2.8 billion.
The acquisition aims to boost LKQ’s North American aftermarket business. Under terms of the deal, LKQ will pay $48 cash for each Uni-Select share.
The purchase price represents a nearly 20% premium over the $40.28 closing price of Uni-Select shares on the Toronto Stock Exchange on February 24.
The transaction needs both shareholder approval and clearance from antitrust regulators in Canada, the U.S., and United Kingdom.
To help ensure the deal proceeds as planned, Chicago-based LKQ said it will sell GSF Car Parts U.K., Uni-Select's U.K. based mechanical parts distribution business.
Uni-Select is based in Boucherville, Quebec and is an aftermarket auto parts distributor.
The company distributes automotive paints, industrial coatings, accessories, and other vehicle products for aftermarket vehicles.
Aftermarket refers to parts and services purchased after the initial sale of a motor vehicle to a consumer.
In business since 1968, Uni-Select currently has 5,200 employees, 15 distribution centres and more than 400 branches, mostly in Canada. The company supports more than 16,000 auto repair shops and another 4,000 shops through its repair-installer and vehicle refinishing units.
Uni-Select’s stock rose 17% on news of the acquisition to reach $46.97 per share. Its stock has gained nearly 80% over the past 12 months.
LKQ’s stock has risen 22% in the past year to now trade at $57.44 U.S. a share.
