FBR & Co. Sees LKQ's (LKQ) Acquisition of Andrew Page Putting Some Concerns to Rest
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FBR & Co. affirms LKQ Corporation (Nasdaq: LKQ) at Outperform with a price target of $40 after the company announced that its United Kingdom subsidiary, Euro Car Parts, has acquired substantially all the business assets of Andrew Page Limited.
The firm commented today,
According to LKQ’s March 2016 investor deck, ECP had 218 branches and generated $1.38B revenue during 2015; this acquisition nearly doubles store count and could expand ECP revenue by as much as $200 million (based on a conservative estimate for Andrew Page revenue/store). From that standpoint, we do not expect meaningful EPS accretion this year; however, and much more importantly, this acquisition demonstrates that LKQ's European consolidation strategy remains on track despite Brexit. We think this was an overhang on sentiment for the stock, and that this announcement could put some concern to rest.
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