Toronto, Ontario -- LKQ Corporation is facing new pressure after Reuters reported on Nov. 13 that the company is looking to sell its Keystone Automotive Industries business. LKQ is a Chicago-based auto-parts supplier worth about US$7.6 billion.
Reuters recently reported that LKQ hired Bank of America to help with the sale. The company also met possible buyers at recent industry events. Keystone could sell for close to US$1 billion, depending on the market. LKQ shares fell after the news. The stock was near US$32 before the Reuters report. It dropped to about US$29.50 by Nov. 19 as investors reacted to the plan.
Keystone is its North American specialty-parts division. It sells aftermarket body parts, accessories and equipment in the United States and Canada.
The possible sale comes as LKQ faces pressure from Ananym Capital. Ananym is a New York-based activist investment firm. It claims LKQ has too many different businesses and wants the company to simplify its structure. It argues LKQ should focus on its stronger North American collision and salvage business. It also believes selling weaker divisions, including both Keystone and the European operation, would make LKQ easier to manage and more profitable.
LKQ has not commented on the Keystone process. Investors are now waiting to see if the company sells the business, how much it gets for it and what the move means for its long-term plans.
