Lkq Corporation · NASDAQ:LKQ
Lkq — Merger or Acquisition (February 2023)
18 slides from Lkq's merger presentation, Feb 27, 2023
Slide 1: LKQ to Acquire Uni-Select - A Leading Distributor of Mechanical Parts and Refinish Paint Products
LKQ to Acquire Uni-Select - A Leading Distributor of Mechanical Parts and Refinish Paint Products Across North America February 27, 2023
Slide 2: Forward Looking Statements
Forward Looking Statements Statements and information included in this presentation that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are made pursuant to the “safe harbor” provisions of such Act. Forward-look
Slide 3: 3
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Slide 4: Mission Statement
Mission Statement To be the leading global value-added and sustainable distributor of vehicle parts and accessories by offering our customers the most comprehensive, available, and cost-effective selection of parts and service solutions while building strong partnerships with our employees and the c
Slide 5: Compelling Transaction for LKQ & Uni-Select Shareholders
Compelling Transaction for LKQ & Uni-Select Shareholders • LKQ to acquire Uni-Select for C$48.00 per share in cash, representing an enterprise value of $2.1bn o Represents a premium of 19.2% to Uni-Select’s closing share price on February 24, 2023 and 20.7% to Uni-Select’s Structure & trailing 20-da
Slide 6: Uni-Select Overview
Uni-Select Overview • A leading distributor of automotive replacement parts, accessories, tools and equipment, paint, and collision repair products across North America and Europe • Founded in 1968 and headquartered in Boucherville, Quebec Key Figures A Leading North American #2 Canadian Mechanical
Slide 7: Acquisition of Uni-Select Expands LKQ's Leading Global Vehicle Parts Distribution Business
Acquisition of Uni-Select Expands LKQ’s Leading Global Vehicle Parts Distribution Business 1 Compelling strategic fit, enhancing LKQ’s existing business and continuing to drive profitable growth FinishMaster complements existing North American paint distribution operations, improving scale & 2 produ
Slide 8: LKQ's Presence in Paint & Mechanical Parts Facilitates Effective Business Integration
1 LKQ’s Presence in Paint & Mechanical Parts Facilitates Effective Business Integration Strategic Fit for LKQ • LKQ entered paint distribution industry in 2007 through acquisition of Keystone Automotive Industries and expanded operations in 2011 through acquisition of Akzo Nobel’s distribution busin
Slide 9: FinishMaster Complements Existing N.A. Paint Distribution Operations
2 FinishMaster Complements Existing N.A. Paint Distribution Operations, Providing Scale to Compete in Attractive & Growing Segment FinishMaster Provides Scope and Scale Low Incremental Costs for an Additional Item on the Truck • FM is one of the largest refinishing distributors with access to most T
Slide 10: LKQ Substantially Grows & Diversifies Its Refinish Paint Customer and Vendor Base
2 LKQ Substantially Grows & Diversifies Its Refinish Paint Customer and Vendor Base LKQ becomes a leading player in the Dramatically expands More diversified vendor base allows LKQ to serve growing $5bn+ North American paint and customer base and mix and attract new customers allied products market
Slide 11: Entry & Expansion Opportunities in Canadian Mechanical Parts
3 Entry & Expansion Opportunities in Canadian Mechanical Parts Through Acquisition of #2 Wholesale Distributor Canadian Automotive Aftermarket Distribution ($bn) Estimated Shares for Wholesale Distributors 5.3$ $5.4 $5.1 Opportunity for $4.8 $4.9 $4.6 Expansion $4.3 $4.5 Competitor 1 $3.9 $3.9 $4.0
Slide 12: Leverage of LKQ's Europe Segment Along With CAG Will Drive Significant Procurement Synergies
4 Leverage of LKQ’s Europe Segment Along With CAG Will Drive Significant Procurement Synergies Suspension & Engine Tools & Fluids / Braking Lubricants Filtration Batteries All Other Steering Accessories Equipment Chemicals LKQ Europe ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Uni-Select’s Canadian Mechanical Parts Offering
Slide 13: Significant Synergy Opportunity to Drive Stockholder Value
4 Significant Synergy Opportunity to Drive Stockholder Value Footprint Optimization Procurement SG&A Opportunities • Rationalize branch and • Consolidate supplier • Eliminate public company costs distribution locations partnerships and relationships • Reduction of delivery fleet size & • Benefit fro
Slide 14: Transaction Enables Numerous Opportunities for Incremental Revenue Growth & Margin Expansion
4 Transaction Enables Numerous Opportunities for Incremental Revenue Growth & Margin Expansion 1 2 3 Sale of recycled & Grow private label Expand product portfolio; remanufactured engines, penetration offer European product transmissions, and kits brands & full OEM car into Canada parc coverage 4 5
Slide 15: LKQ is Committed to Maintaining Strong Investment Grade Balance Sheet
5 LKQ is Committed to Maintaining Strong Investment Grade Balance Sheet • LKQ is committed to maintaining investment grade credit ratings Total Debt / EBITDA • Targeting reduction of total leverage(1) from ~2.4x at transaction close to <2.0x ~2.4x within 18 months, via: <2.0x o Combined annual FCF g
Slide 16: LKQ - Keeping you moving
LKQ 2 Keeping you moving
Slide 17: Appendix
LKQ 2 Keeping you moving
Slide 18: Uni-Select Segment EBITDA Reconciliation
Uni-Select Segment EBITDA(1) Reconciliation 2022A EBITDA (As Reported) $159,601 (+) Change in Estimate Related to Inventory Obsolescence 10,927 (+) Stock-based Compensation 13,269 (+) Restructuring and other charges 1,227 Adjusted EBITDA (As Reported) $185,024 (-) Total U.S. GAAP Adjustments (30,184