An entrepreneur who set up a car parts shop in 1978 after his family fled from Africa will pocket up to £280m after he sold the business to a larger US operator.
Sukhpal Singh Ahluwalia, the chairman and managing director of Euro Car Parts, has sold the after-market supplier to the Chicago-based LKQ, which is looking to expand in Europe and the UK.
Euro Car Parts distributes replacement car and van parts from 89 locations, with car servicing, such as MOTs, accounting for about 90 per cent of revenues and collision-related replacements the remainder.
Mr Singh, whose family escaped to London from Idi Amin's feared regime in Uganda, will receive an initial £225m from the deal with LKQ, plus up to £55m more if Euro Car Parts hits growth targets in 2012 and 2013.
Mr Singh and his family hold 100 per cent of the company's shares.
He started the business 33 years ago by buying a bankrupt car parts shop in Willesden, north-west London, with funding of £5,000 from his father and a small bank loan.
Euro Car Parts sells 114,000 products to more than 120,000 commercial customers and is expected to deliver revenues of up to $125m in the fourth quarter of 2011.
It made a pre-tax profit of £15.8m for the year to 31 December, on revenues up 45 per cent at £272m.
Mr Singh will retain his current dual role and will join the board of LKQ.
He said yesterday: "We are excited to continue our successful growth with the LKQ team. Under my continuing leadership, this new partnership with LKQ will help the experienced Euro Car Parts management team to continue our rapid expansion in the UK market, in existing products and markets sectors, and to explore additional opportunities throughout Europe."
The acquisition launches LKQ – which provides after-market and refurbished replacement products, such as wheels, bumper covers and lights – in the UK. Before the deal, it had 341 outlets in the US, Canada, Mexico and Central America.
Robert Wagman, the president and co-chief executive of LKQ, said: "Euro Car Parts provides an ideal entry point to Europe for LKQ. With this acquisition, we will work with Euro Car Parts customers and suppliers to expand the use of alternative automotive parts in the UK."
Mr Wagman declined to say which European markets LKQ would target, but said the Netherlands was one option. Citing the scale of the opportunity for the US company in Europe, he pointed out that Euro Car Parts had only 10 per cent of the UK market, and that Europe had 285 million cars.
The acquisition will propel Mr Singh, who worked on market stalls in London's Liverpool Street and Petticoat Lane before starting his business, up the Sunday Times Rich List, where he featured at 313th this year based on a personal fortune estimated at the time at £225m.Reuse content