LKQ President: ‘We Will Consolidate Some Locations into Our Warehouses’

Robert Wagman, LKQ CEO, speaking during his company's investor day on Tuesday.

Robert Wagman, LKQ CEO, speaking during his company’s investor day on Tuesday.

“Pittsburgh Glass Works (PGW) has 119 locations. A lot of those will be consolidated into LKQ warehouses or vice versa. We’ll combine our distribution,” said Rob Wagman, LKQ Corp. president and CEO during an investor day in New York City on Tuesday.

In late February, LKQ signed an agreement to acquire PGW from private equity firm Kohlberg & Co. LLC and PPG Industries Inc.

LKQ Corp. is a provider of alternative specialty parts to repair and accessorize automobiles and other vehicles. The company has operations in North America, the United Kingdom, the Netherlands, Belgium, France, Scandinavia and Taiwan. It offers customers a broad range of replacement systems, components, equipment and parts to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

“We are one and done,” Wagman said. “We are not going to do another OE deal. This deal was unique. PGW is a net buyer of glass. They are buying more glass outside of the network because they can’t produce enough to meet their needs. In the event of a downturn, we would simply shift that business from the OE to our own aftermarket business. I’m not wishing for a downturn in OE … but this is a buffer we don’t have in any of our other businesses.”

PGW’s market share is 25 percent in OE and 22 percent in aftermarket glass, according to the CEO.

“There is a great opportunity to expand this business and we will do that,” he said. “We also think it’s a great opportunity for our European operations where we can use our well-built infrastructure in countries we operate. We can put glass on the truck.”

Just about every time an airbag goes off, a new windshield is needed, he explained. This means strong cross-selling opportunities.

“The industry trends on windshields are just phenomenal,” Wagman said. “There is heads up display. There are antennas and rain sensors. There is a defogger that will be able to defog your windshield in 10 seconds. A tremendous amount of technology and PGW is on the leading edge of that.”

The transaction is expected to close in the second quarter of 2016 and is subject to customary closing conditions and necessary regulatory approvals. PGW is being acquired for an enterprise value of $635 million.

PGW serves more than 7,000 aftermarket customers, according to Wagman.

For more on LKQ’s deal to acquire PGW, click here.

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1 Response to LKQ President: ‘We Will Consolidate Some Locations into Our Warehouses’

  1. alan says:

    i would hope all glass installation companies stop purchasing any thing from them. In just a few words, lkq told you they were going to sell glass directly to who ever they wanted. So every collision center in America they service could be buying glass from them in the near future. why would you want to support a company that plans to deliver glass to your customer?? as they combine these warehouses you will see people losing there jobs. why would they need both delivery trucks when they just said it will fit on there existing trucks. I guess soon you can bet our insurance friends will jump on this band wagon and be getting windshield delivered to body shops and maybe peoples home for us monkeys to install. look guys now state farm and parts trader has another way to drive prices down. I could pick up scrap metal and make more money.

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