Demonstrating Baird's in-depth knowledge of the industries it covers and the strength of its global relationships, the firm recently advised on the sale of Euro Car Parts Holding Limited (ECPH) to LKQ Corporation (LKQ).
The deal – valued at up to £280 million – involved the U.K.'s leading aftermarket distributor of car and vehicle parts and North America's largest provider of aftermarket refurbished and recycled collision replacement parts and products.
“We were able to leverage our deep knowledge of the aftermarket distribution sector globally,” said David Silver, Head of European Investment Banking and the U.K. lead on the deal. “Our ability to cultivate relationships in both markets gave the seller greater access to a buyer that would meet his needs and put forward a compelling proposal.
Developing the deal
Sukhpal Singh began ECPH in a single car part shop in 1978. After more than 30 years, he began to consider selling his business. As the company's management considered investment banks to work with on the deal, they chose Baird because of the firm's automotive sector knowledge, its global approach and its ability to identify the best potential buyers.
Sukhpal had a very deep, personal investment in his business, so it was vital to him and the management team that any company buying ECPH honor its legacy and continue to grow the business.
Baird introduced the management teams of both companies and began to foster the trusting relationship the Investment Banking team knew was needed to seal the deal. Over the next year, Baird's team facilitated numerous meetings and helped LKQ gain Sukhpal's respect by demonstrating an understanding of ECPH and LKQ's long-term goals for the company.
“One of our first meetings in the U.S. was at a facility LKQ had purchased at which members of the family who originally owned the business still worked,” said Adam Czaia, Investment Banker and the U.S. lead on the deal. “They were able to personally describe LKQ's culture and Sukhpal began to feel that LKQ could be a good fit culturally and provide great opportunities for his employees going forward.”
Sealing the deal
Baird's deep sector knowledge and the value it had shown ECPH and LKQ, however, helped the firm lead the companies to a fair assessment of the deal and find common ground in negotiations.
“This was about more than finding a buyer who would pay the most for ECPH. It was about finding the best fit for both companies,” David said. “This deal allowed Euro Car Parts to continue its legacy as the top provider of parts in Europe while continuing to grow LKQ's business model, which has been so successful in North America.”
By November 2012, LKQ's stock price was up more than 50% - trading over $21 a share, compared to about $12.25 a year earlier.
The company also reports that ECPH has grown revenue 22% over the comparable pre-acquisition period.
“This deal demonstrates the power of our collaborative, team-oriented business. It highlights our ability to identify and cultivate strategic buyers across the globe, while meeting the unique and varied needs of sellers,” Adam said.
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|Baird: A global team
“This is yet another example of how well integrated our U.S. and European M&A teams really are, and how much they truly understand and focus on the needs of our clients,” said Steve Booth, Chief Operating Officer and Director of Investment Banking. “We don't have separate teams in Europe and Asia and North America; we truly have one team with people in all those locations.”
Most Investment Banking firms that operate in multiple locations treat each location as though it were a separate entity – the money, the people and the teams remain separate. For instance, if a company in Europe buys a company in the United States, the European Investment Banking team would prepare for and execute the entire deal, even handling all work overseas.
Baird, on the other hand, operates as one team, using the specialties and connections of its resources in each location to provide local access. That high degree of collaboration and communication provides clients real-time perspective and direct access to local experts.