Dec. 9 – Mexico’s Vitro, S.A.B. de C.V. North American glass producer, announced today that it has reached an agreement to acquire Pittsburgh Glass Works LLC (“PGW”) automotive Original Equipment Manufacturer (OEM) glass business from LKQ Corporation for a total consideration of about $310 million USD.
The transaction is expected to be completed in the first quarter of 2017 and is subject to customary closing conditions and necessary regulatory approvals, according to an LKQ release today.
LKQ Corporation will retain its aftermarket glass distribution business, which will not be part of the transaction, according to Vitro. The acquisition will be funded with US$80 million cash and a US$230 million loan from BBVA Bancomer, which was simultaneously signed with this agreement.
As part of this transaction, Vitro and LKQ agreed to enter into a multi-year purchase agreement whereby Vitro will supply LKQ’s aftermarket glass distribution business with an already agreed-upon volume, according to the Vitro release.
“We are pleased to have reached this agreement, our second acquisition in the year, which is complementary to the recent acquisition of the construction glass business from PPG,” said Adrián Sada González, chairperson of the board of directors of Vitro. “With this investment we will continue to strengthen our Automotive Glass division, a key business for Vitro, thus fulfilling our commitment to create value for our shareholders.”
LKQ will report the financial information for the OEM glass manufacturing business as discontinued operations in its fourth quarter and full year 2016 financial statements, which will be released in late February 2017.
“We are very pleased with this transaction and look forward to a seamless transition for our OEM glass customers and employees,” said Robert L. Wagman, president and CEO of LKQ Corporation. “PGW’s industry-leading OEM business fits well with Vitro’s long-term growth strategy within the automotive glass manufacturing industry, and this divestiture allows LKQ to focus on our aftermarket glass distribution operations and the synergies that exist with our core North American auto parts distribution business.”
Adrián Sada Cueva, CEO of Vitro, added that he is very excited to have reached this agreement.
“The addition of PGW’s original equipment business will enable us to serve a greater number of customers as well as increase our geographic coverage,” he said. “PGW’s state of the art technology will enhance our efforts in innovation and technological development in the sector. We are confident that this acquisition will strengthen Vitro and will lay the foundation for creating a business with greater growth potential enhanced by the great talent of the employees of both companies.”
Calls to Pittsburgh Glass Works were not returned.