US based auto parts maker LKQ has entered into an agreement to acquire Rhiag-Inter Auto Parts for €1.04bn to expand its presence in European market.
Rhiag-Inter Auto Parts is pan-European business-to-business distributor of aftermarket spare parts that are used in passenger cars and commercial vehicles.
The company operates in Italy, Switzerland, Hungary, Romania, Ukraine, Bulgaria through 247 distribution centers and 10 warehouses.
The auto parts maker plans to initially finance the acquisition with borrowings on its revolving credit facility. It will assume Rhiag's debt.
The company has $1.3bn of available borrowing capacity on its credit facility as on 30th September2015.
LKQ Corporation president Robert L. Wagman said: "Rhiag expands our addressable market with the addition of 10 new countries to our European footprint.
"Rhiag has a strong market position in Italy and theCzech Republic and experienced management teams in their respective markets.
"Clearly this acquisition will accelerate our strategy of creating a Pan-European aftermarket mechanical parts distribution business in this highly-fragmented €188 billion wholesale DIFM market."
BofA Merrill Lynch acted as exclusive financial advisor for the company in connection with the transaction, and JP Morgan and UBS acted as financial advisors to Apax Partners and Rhiag Group.
