LKQ Corporation Agrees to Sell its Self Service Segment

Rhea-AI Summary

LKQ Corporation (NASDAQ:LKQ) has announced the sale of its Self Service segment ("Pick Your Part") to Pacific Avenue Capital Partners, LLC for an enterprise value of $410 million. The transaction, expected to close in Q4 2025, is part of LKQ's strategic transformation to simplify its portfolio and focus on core segments.

The sale resulted from a competitive bid process and aligns with LKQ's long-term strategy of portfolio optimization. The company plans to use the net proceeds to strengthen its balance sheet through debt reduction. The deal's completion is subject to customary closing conditions and regulatory approval.

Positive

• Strategic sale value of $410 million strengthens company's financial position
• Transaction enables greater focus on core business segments
• Net proceeds will be used to reduce debt and improve balance sheet
• Deal resulted from robust competitive bidding process indicating strong asset value

Negative

• Divestment of historically meaningful business segment reduces revenue diversification
• Transaction subject to regulatory approval which could delay or prevent closing

Insights

Corporate Strategy Analyst

LKQ's $410M divestiture of Pick Your Part aligns with strategic simplification, strengthening balance sheet through debt reduction.

LKQ Corporation's decision to sell its Self Service segment ("Pick Your Part") for $410 million represents a strategic pivot that deserves careful analysis. This divestiture is part of a deliberate multi-year transformation strategy to streamline operations and focus on core business segments with stronger leadership positions.

The transaction follows what the company describes as a "robust competitive bid process," suggesting management secured favorable terms through multiple interested parties. This competitive process likely helped maximize the value received for an asset deemed non-core to future operations.

Strategically, this move signals LKQ's evolution from its historical acquisition-driven growth model to a more refined operational approach. After years of expansion through acquisitions, management has determined that the Self Service segment no longer aligns with their long-term vision, despite its historical significance to the company.

The announcement that proceeds will be used for debt reduction demonstrates fiscal discipline and a commitment to strengthening the balance sheet. This deleveraging will improve financial flexibility, potentially enabling more strategic investments in priority segments or returning value to shareholders through other means in the future.

Timing is also noteworthy - with completion expected in Q4 2025 pending regulatory approvals. The transaction structure appears straightforward with a defined enterprise value of $410 million, subject to customary adjustments, suggesting minimal execution risk beyond standard regulatory review.

This divestiture clearly advances LKQ's stated goal of becoming "a more focused, high-performing company" by pruning non-core assets. Investors should view this as evidence that management is executing on its communicated strategy of portfolio simplification and resource reallocation toward higher-priority business segments.

Transaction Advances LKQ Corporation’s Strategic Plan to Simplify Corporate Structure and Focus on Core Segments

ANTIOCH, Tenn., Aug. 26, 2025 (GLOBE NEWSWIRE) -- LKQ Corporation (Nasdaq: LKQ) (“LKQ” or the “Company”) today announced it has entered into a definitive agreement to sell its Self Service segment (“Pick Your Part”) to an affiliate of Pacific Avenue Capital Partners, LLC for an enterprise value of $410 million, subject to customary post-closing purchase price adjustments. This proposed transaction was the result of a robust competitive bid sale process that attracted interest from several parties.

“Today’s announcement marks another important step in our multi-year transformation to simplify our portfolio and become a more focused, high-performing company with leadership positions in our priority segments,” said Justin Jude, LKQ’s President and Chief Executive Officer. “While Pick Your Part has played a meaningful role in our history, we believe that it no longer aligns with our long-term strategy. As we have said, after having built the Company through thoughtful acquisitions over many years, we have reached a point where it makes sense to assess opportunities to simplify and sharpen our focus. We will continue to evaluate opportunities to advance our strategic objectives so that we can best serve customers and create value for our shareholders.”

Mr. Jude added, “We know the Pick Your Part team will continue to be best-in-class operators under the ownership of Pacific Avenue Capital Partners. We thank all Pick Your Part employees for their efforts and years of service at LKQ and wish them the best.”

The net proceeds from the sale will be used to strengthen LKQ’s balance sheet through debt repayment.

The transaction is expected to be completed during the fourth quarter of 2025, subject to the satisfaction of customary closing conditions, including receipt of required regulatory approval.

Jefferies LLC served as the financial advisor to LKQ, and Wachtell, Lipton, Rosen & Katz served as the legal advisor to LKQ in connection with the transaction.

About LKQ Corporation

LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. LKQ has operations in North America, Europe and Taiwan. LKQ offers its customers a broad range of OEM recycled and aftermarket parts, replacement systems, components, equipment, and services to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

Forward Looking Statements

This communication contains forward-looking statements, including, but not limited to, statements related to the proposed sale of Pick Your Part by LKQ. Words such as “expects,” “anticipates,” “aims,” “projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “assumes,” “may,” “should,” “could,” “would,” “foresees,” “forecasts,” “predicts,” “targets,” “will”, “commitments,” variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are based upon LKQ’s current plans, assumptions, beliefs, and expectations. Forward-looking statements are subject to the occurrence of many events outside of LKQ’s control. Actual results and the timing of events may differ materially from those contemplated by such forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties.

These risks and uncertainties include, among other things, statements regarding the expected benefits to LKQ and its respective customers from completing the transaction, plans for future investment and capital allocation, the expected financial performance of LKQ following the expected completion of the transaction, and the expected completion of the transaction. Statements regarding future events are based on the parties’ current expectations, estimates and projections and are necessarily subject to associated risks related to, among other things, (i) the completion of the proposed transaction on the anticipated terms and timing, or at all, including the parties’ ability to obtain the required regulatory approval and satisfy other conditions to the completion of the transaction, (ii) the effect of the announcement or pendency of the proposed transaction on LKQ’s business, operating results, ability to retain and hire key personnel, and relationships with customers, suppliers, competitors and others, (iii) risks that the proposed transaction may disrupt LKQ’s current plans and business operations or divert management’s attention from ongoing business operations, (iv) the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement entered into in connection with the proposed transaction, (v) legislative, regulatory and economic developments and (vi) general economic conditions.

For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to LKQ’s periodic reports and other filings with the Securities and Exchange Commission, including the information identified under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in LKQ’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, available on LKQ’s investor relations website at lkqcorp.com and on the SEC website at www.sec.gov. The forward-looking statements included in this communication are made only as of the date hereof. Forward-looking statements should be considered in light of these risks and uncertainties. Investors and others are cautioned not to place undue reliance on forward-looking statements. LKQ does not undertake any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.

Contacts:

Joseph P. Boutross
Vice President, Investor Relations
LKQ Corporation
(312) 621-2793
jpboutross@lkqcorp.com

FAQ

How much is LKQ selling its Self Service segment for?

LKQ is selling its Self Service segment (Pick Your Part) for an enterprise value of $410 million to Pacific Avenue Capital Partners, LLC.

When will LKQ's Self Service segment sale close?

The transaction is expected to close during the fourth quarter of 2025, subject to customary closing conditions and regulatory approval.

What will LKQ do with the proceeds from the Self Service segment sale?

LKQ will use the net proceeds to strengthen its balance sheet through debt repayment.

Why is LKQ selling its Self Service segment?

LKQ is selling the segment as part of its multi-year transformation strategy to simplify its portfolio and focus on priority segments where it has leadership positions.

Who are the advisors for LKQ's Self Service segment sale?

Jefferies LLC served as the financial advisor, and Wachtell, Lipton, Rosen & Katz served as the legal advisor to LKQ for the transaction.