CHICAGO — LKQ Corp. has acquired Greenleaf Auto Recyclers LLC from Schnitzer Steel Industries (SSI). Greenleaf is the entity through which SSI operated in the late model automotive parts recycling business.
In addition, SSI has acquired from LKQ four retail-oriented self-service recycling facilities in Oregon and Washington. LKQ also sold certain business assets to SSI related to two self-service facilities in Northern California and a self-service facility in Portland, Ore. LKQ will close the two self-service facilities in Northern California and convert the self-service operation in Portland, Ore., to a wholesale recycling business.
LKQ has also agreed, subject to customary closing conditions, to sell SSI two self-service recycling facilities in Dallas, Texas, with an anticipated closing date in mid-January 2010.
Terms of these transactions were not disclosed.
"These transactions provide us with additional wholesale recycling capacity and enhanced customer penetration in numerous markets in our late model recycled auto parts business line, and provide our initial entry to the northern Virginia market," said Joe Holsten, LKQ’s president and chief executive officer.
Holsten added, "While the self-service operations we are disposing of are good businesses, they fit better with SSI’s operations and business model."
The wholesale recycling business acquired consists of 17 operating locations. These facilities are located in Michigan, Ohio, Massachusetts, Virginia, North Carolina, Georgia, Florida, Texas and Nevada. LKQ plans to merge certain locations together with its existing wholesale recycling operations, which will result in the elimination of approximately 11 operating locations.
LKQ expects to incur restructuring expenses in 2009 and 2010 related to the Greenleaf consolidation efforts. In addition there will be restructuring expenses related to the closing of the self-service businesses in 2009.
In looking at the effect of acquiring Greenleaf and selling or closing the self-service businesses, LKQ expects operating results excluding any restructuring expenses or transaction gains or losses to be dilutive in 2009 by approximately 1 cent in diluted earnings per share. However, LKQ said it expects the effects of these transactions on operating results excluding any restructuring expenses or transaction gains or losses over the next four years to be accretive to diluted earnings per share by almost 2 cents in 2010, and by 3 cents to 4 cents after all synergies are implemented.
