Vitro to Acquire PGW OEM Business

Vitro, S.A.B. de C.V., hereinafter “Vitro” or the “Company”, a leading North American glass producer headquartered in Mexico, announced it has signed a definitive agreement to acquire Pittsburgh Glass Works LLC (“PGW”) automotive Original Equipment Manufacturer (OEM) glass business from LKQ Corporation for a total consideration of approximately US$310 million.

Prior to closing, LKQ Corporation will spin off and retain the aftermarket glass distribution business, which will not be part of the transaction. 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 US$ 2,212 million and US$ 378 million, respectively, and a ratio of Debt / pro forma EBITDA of 1.99 times, and a Net Debt / pro forma EBITDA ratio of 1.73 times.

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.

The Chairman of the Board of Directors of Vitro, Adrián Sada González said, “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.

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, said, "We are very excited to have reached this agreement between LKQ and Vitro. 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. 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.”

The transaction is subject to customary closing conditions and necessary regulatory approvals.

Cleary Gottlieb Steen & Hamilton acted as legal advisor for Vitro in this transaction.