One Equity Carves PGW Auto Glass from LKQ

One Equity Carves PGW Auto Glass from LKQ

PGW Auto Glass had almost $400 million of revenue in 2021 with an EBITDA margin of about 10%

PGW’s products include OEM windshields, rear and side windows, sunroofs and assemblies sold to auto and truck manufacturers

SOURCE: Getty Images

One Equity Partners has agreed to acquire PGW Auto Glass, a wholesale and retail distributor of aftermarket automotive glass products, from LKQ Corporation.

PGW’s products include OEM windshields, rear and side windows, sunroofs and assemblies sold to auto and truck manufacturers. The company also supplies and distributes replacement automotive glass products for use in the aftermarket and a range of related products including adhesives, mirrors, wiper blades, towels and hand tools.

Pittsburgh-based PGW (Pittsburgh Glass Works) operates 113 facilities across the United States and Canada, has more than 500 customized glass delivery vehicles, and 900 employees. The company is led by current Vice President and General Manager Todd Fencak, who will continue leading the company as CEO following the closing of the transaction.

According to LKQ, PGW generated almost $400 million of revenue and its EBITDA margin was approximately 10% in 2021. LKQ acquired PGW from KKR in 2016 for $635 million.

“OEP has a strong track record of building market-leading industrial companies through organic and inorganic investment initiatives that drive operational performance, add product capabilities and expand geographic reach,” said Mr. Fencak. “We are pleased to be partnering with OEP as we continue to further develop and grow the company.”

OEP is a middle-market private equity firm focused on the industrial, healthcare, and technology sectors in North America and Europe. The firm spun out of JP Morgan in 2015 and has closed more than 300 transactions worldwide since its founding in 2001. OEP has offices in New York, Chicago, Frankfurt.

“We’re excited to partner with Todd and his team for the next chapter of the PGW story,” said Steve Lunau, a managing director at OEP. “The North American auto glass sector is witnessing unprecedented levels of advancement and innovation. PGW, with a century-old reputation for industry-leading quality customer service, is well-positioned to accelerate into its next phase of growth and development as a standalone enterprise. OEP is ready to invest behind the PGW management team to help them tap into new and exciting trends in the sector.”

LKQ (Like Kind and Quality) (NASDAQ: LKQ), is a provider of alternative and specialty parts used to repair and accessorize automobiles, trucks, and recreational vehicles. The company was founded by Donald Flynn in 1998 with the purchase of Akron-based Triplett Automotive Recycling and has completed more than 270 acquisitions of used and refurbished auto parts suppliers and manufacturers. LKQ, led by CEO Dominick Zarcone, has operations in North America, the United Kingdom, the Netherlands, Belgium, France, Scandinavia, and Taiwan. LKQ is headquartered near Nashville in Antioch, Tennessee.

“This divestiture reinforces our ongoing commitment to review our portfolio of businesses, rationalize our asset base, and divest non-core businesses,” said Mr. Zarcone. “We are confident that the PGW management team, in partnership with OEP, will continue to deliver great outcomes for PGW’s customers. We wish them both continued success in the future.”

The buy of PGW is expected to close in the second quarter of 2022.

© 2022 Private Equity Professional | March 24, 2022

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