Euro Car Parts has been bought by a US aftermarket supplier in a deal that could top £280 million.

LKQ Corporation has acquired the UK's largest independent distributor of replacement vehicle components with 89 locations and 3,500 employees. Euro Car Parts has more than 120,000 commercial customers at 89 UK locations.

In addition to the initial purchase price, the value of the deal could increase by up to £55m if Euro Car Parts meets certain growth targets in 2012 and 2013. The payments related to the growth targets would be payable in 2013 and 2014.

LKQ says the acquisition is expected to generate quarter four 2011 revenue of approximately $120 million to $125 million (£78 - £81m).

In addition LKQ has also amended and restated its credit facility, increasing the facility by $400m (£261m) to $1.4 billion (£912m).

This allows the company to draw an additional $200 million term loan prior to March 31, 2012 and increases the size of the revolving credit loan capacity by $200 million to $950 million. The acquisition of Euro Car Parts was primarily financed by drawing on the amended credit facility.

Euro Car Parts was started by chairman and managing director Sukhpal Singh Ahluwalia in Wembley. The company is wholly owned by his family.

He said: "LKQ Corporation is arguably the most dynamic and successful company in the North American automotive aftermarket for collision parts. They have a dedicated and focused management team which has built an innovative company with a very strong work ethic. We feel very much in tune with this culture and with our new colleagues, all of whom have many years of experience in this business."

LKQ is a supplier to US and Canadian markets. This is its first acquisition outside of North America and is meant to fuel UK expansion in the UK aftermarket.

"Euro Car Parts provides an ideal launching point for our European entry. With this acquisition we will work with Euro Car Parts’ customers and suppliers to expand the use of alternative automotive parts in the UK," said LKQ president and co-CEO Robert Wagman.

Robert W. Baird & Co acted as exclusive financial advisor to Euro Car Parts.