Independent aftermarket supplier Euro Car Parts has been bought by a US group in a deal that could top £280 million.
The £187m turnover business, which has 89 sites in the UK and was wholly owned by founder Sukhpal Singh and his family, has been taken over by LKQ Corporation, a company specialising in supplying aftermarket parts to the US and Canadian crash repair markets.
LKQ has agreed to pay £225m, but could pay a further £45m on top if ECP hits its growth targets in 2012 and 2013.
It is LKQ’s first expansion outside the US.
Singh has agreed to stay on as its chairman and managing director, together with the existing board, and retains a “substantial” financial interest in the business.
He expects the new owners to help ECP continue expanding in its current markets and identify new ones.
It could pose quite a challenge to the franchised dealer sector, particularly those groups which also have major aftermarket parts supply operations, such as Lookers and Pendragon.
Over the past 12 months, ECP has opened a 500,000sq ft national distribution centre, nine reg-ional warehouse ‘hubs’ and several new branches.
Sales and profits grew substantially in the first six months of 2011 compared with the previous year.
Singh started ECP by buying a parts shop in Willesden, north London, for £5,000, using funds from his father and a small bank loan.
Three decades on, the business employs 3,500 people and serves 120,000 trade customers annually.
Most are independent garages. However it also has important national contracts, like one to supply batteries to the RAC.
LKQ president and co-CEO Robert Wagman said: “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.”