Vitro S.A.B. de C.V., a North American glass producer headquartered in Mexico, has signed a definitive agreement to acquire Pittsburgh Glass Works’ (PGW) automotive original equipment manufacturer (OEM) glass business from LKQ Corporation for approximately $310 million. The transaction is subject to customary closing conditions and necessary regulatory approvals.

Prior to closing, LKQ Corporation will spin off and retain the aftermarket glass distribution business, which will not be part of the transaction, according to Vitro. The acquisition will be funded with US$80 million cash and a US$230 million loan from BBVA Bancomer which was simultaneously signed with this agreement.

Vitro is acquiring seven manufacturing plants, two satellite facilities and two float glass furnaces in the United States, one manufacturing plant in Poland and an equity share in two joint ventures located in North America and China. On a pro forma basis, based on FY 2015 figures, this transaction together with the recent acquisition of the PPG Architectural Flat Glass business would have resulted in Sales and EBITDA of $ 2.212 billion and $378 million, respectively.

As part of this transaction, Vitro and LKQ agreed to enter into a multi-year purchase agreement whereby Vitro will supply LKQ’s aftermarket glass distribution business with an already agreed-upon volume.

“We are pleased to have reached this agreement, our second acquisition in the year, which is complementary to the recent acquisition of the construction glass business from PPG,” says Adrián Sada González, the chairman of the board of directors of Vitro. “With this investment we will continue to strengthen our automotive glass division, a key business for Vitro, thus fulfilling our commitment to create value for our shareholders.”

Adrián Sada Cueva, CEO of Vitro, added that he is very excited to have reached this agreement.

“The addition of PGW’s original equipment business will enable us to serve a greater number of customers as well as increase our geographic coverage. PGW’s state-of-the-art technology will enhance our efforts in innovation and technological development in the sector,” he said. “We are confident that this acquisition will strengthen Vitro and will lay the foundation for creating a business with greater growth potential enhanced by the great talent of the employees of both companies.”

 

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