LKQ Corp. to Acquire Equity Interest in Mekonomen Group

LKQ Corp. announced November 28 that it has entered into an agreement to acquire an equity interest in Mekonomen AB from Axel Johnson AB.

Source: LKQ Corporation

Source: LKQ Corporation

LKQ is a distributor and marketer of specialty aftermarket equipment and accessories in North America, distributor of parts in the United Kingdom and in the Netherlands. LKQ acquired Pittsburgh Glass Works (PGW) earlier this year.

Headquartered in Stockholm, Sweden, Mekonomen Group is the leading independent car parts and service chain in the Nordic region of Europe, offering a wide range of quality products, including spare parts and accessories for cars, and workshop services for consumers and businesses.

“Our strategic investment in Mekonomen Group allows us to obtain a significant interest in a leading company with a strong brand and a diverse operating model,” said Robert L. Wagman, president and CEO of LKQ Corp. “This transaction is a natural extension of our goal to becoming the preeminent pan-European distributor of aftermarket automotive parts and accessories.”

Under the terms of the definitive agreement, LKQ will acquire a 26.5 percent equity interest in Mekonomen AB, and the transaction is expected to close in early December. LKQ intends to nominate two representatives for election to Mekonomen AB’s board of directors to replace Axel Johnson AB’s two representatives.

Third Quarter 2016 Financial Results Released

LKQ earlier reported revenue for the third quarter of 2016 of $2.39 billion, an increase of 30.3 percent, as compared to $1.83 billion in the third quarter of 2015. Net income for the third quarter of 2016 totaled $122.7 million, an increase of 21.1 percent, as compared to $101.3 million for the same period of 2015.

On an adjusted basis, net income was $139.3 million, an increase of 26.8 percent, as compared to the $109.9 million for the same period of 2015. Diluted earnings per share for the third quarter of 2016 was $0.40, an increase of 21.2 percent, as compared to $0.33 for the same period of 2015. On an adjusted basis, diluted earnings per share was $0.45 in the third quarter of 2016, reflecting a 25.0 percent increase over $0.36 for the same period of 2015.

Revenue, Net Income Increases

On a nine-month year-to-date basis, revenue was $6.76 billion, an increase of 24.2 percent from $5.44 billion for the comparable period of 2015. Parts and services organic revenue growth for the first nine months of 2016 was 5.1 percent. Net income for the first nine months of 2016 was $377.6 million, as compared to $328.2 million for the same period of 2015. Diluted earnings per share was $1.22 for the first nine months of 2016, reflecting a 14.0 percent increase, as compared to $1.07 for the comparable period of 2015. On an adjusted basis, diluted earnings per share was $1.41 in the first nine months of 2016 reflecting a 22.6% increase over $1.15 for the same period of 2015.

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