LKQ Corp. and The Coast Distribution System Inc. have signed a definitive agreement for LKQ to acquire Coast. Coast is a leading distributor of replacement parts, supplies and accessories for recreational vehicles (RVs) primarily to retail part and supply stores, service and repair establishments and new and used RV dealers in North America.
Under the terms of the agreement, a subsidiary of LKQ will commence a tender offer to acquire all outstanding shares of Coast’s common stock for $5.50 per share in cash. The tender offer is required to be commenced within 10 business days and to remain open for at least 20 business days after launch. The consummation of the tender offer is subject to satisfaction of customary conditions, including that the holders of at least a majority of Coast’s outstanding shares accept the offer. Any shares not tendered in the offer will be acquired, following consummation of the tender offer, in a second step merger at the same cash price as in the tender offer. The acquisition is currently expected to close in the third quarter of 2015. Coast’s board of directors has unanimously recommended that Coast stockholders accept the offer and tender their shares. Total cash consideration payable for Coast’s outstanding shares is approximately $29 million. As of June 30, Coast had $19.5 million outstanding under its long-term revolving bank line of credit.
“The combination of Coast with our specialty segment and RV business presents tremendous distribution and logistics synergies with our existing network, and expands our RV business with the addition of unique product offerings and brands,” said Robert Wagman, president and CEO of LKQ Corp.
Robert W. Baird & Co. Inc. and Duff & Phelps LLC are acting as financial advisers to The Coast Distribution System Inc. in this transaction.