Thank you for joining this morning's analyst call to discuss LKQ Corporation's definitive agreement to acquire Uni-Select, Inc. I would now like to turn the call over to Joseph Boutross, LKQ's Vice President of Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone, and thank you for joining us to discuss the definitive agreement LKQ has entered into to acquire Uni-Select Incorporated. With us today are Nick Zarcone, LKQ's President and Chief Executive Officer, Rick Galloway, our Senior Vice President and Chief Financial Officer, and Justin Jude, President of our Wholesale - North America. Please refer to the LKQ website at lkqcorp.com for our release issued this morning, as well as the accompanying slide presentation for this call. Now, let me quickly cover the safe harbor. Some of the statements that we make today may be considered forward-looking. These include statements regarding our expectations, beliefs, hopes, intentions, or strategies. Actual events or results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors. For more information, please refer to the risk factors discussed in our Form 10-K and subsequent reports filed with the SEC. Before I turn the call over to Nick, when we open the call for questions, we request that you please limit your questions to the pre-prepared remarks, the press release slide deck that we provided ahead of this call. Given we have not closed, pardon me, and we are limited on what we can say beyond the materials that we provided. With that, I'm happy to turn the call over to Nick Zarcone. Thank you, Joe. Good morning to everybody on the call. We greatly appreciate your time and attention today as we have some very exciting news to share with you. Early this morning, we signed a definitive agreement to acquire Uni-Select, a publicly traded company that is headquartered just outside of Montreal and traded on the Toronto Stock Exchange. This call is to provide you with an overview of the transaction. Joe mentioned, there's a slide deck available on our website that we will refer to during this call. Page 4 of that presentation sets forth the LKQ mission statement. I start every presentation with this slide because everything we do at LKQ comes back to the words on this page. The same is true with the transaction announced this morning. It is wholly consistent with our goal of being a leading global value-added and sustainable distributor of vehicle parts and accessories. Bringing Uni-Select into the LKQ family will allow us to better serve our customers. Now on to page five, where we provide some highlights on the transaction. As you will note, the offer is to acquire Uni-Select for CAD 48 per share in cash. The price reflects a premium of about 19% over Uni-Select's closing price on Friday afternoon. From a valuation perspective, it represents a multiple of approximately 9.7x 2023 EBITDA on a U.S. GAAP basis after taking into account the full run rate of synergies that we anticipate we will get from the transaction. Lastly, we will be selling Uni-Select's U.K.-based business to be responsive to the antitrust process in the U.K. There are some very significant financial benefits that will accompany this acquisition that Rick will highlight, including $55 million of cost savings that we are confident will be fully attained within three years of closing. There are other growth and margin opportunities based on the combined product lines. The transaction will be EPS accretive in the first year post-closing, then we'll build from there. We have a solid financing plan. We are highly confident this transaction will not impact our investment-grade ratings. The transition funding will initially take our leverage ratio to about 2.4 times, we will be able to get back below 2 times within about 18 months. As is typical, the transaction needs to be approved by Uni-Select's shareholders. Importantly, two of Uni-Select's largest shareholders have provided voting and support agreements as part of the overall acquisition agreement, which in Canada is called a plan of arrangement. In addition to the shareholder vote, we will need to receive the consent of the Canadian court and regulatory approvals in 3 separate countries. With all that, we anticipate the transaction will close sometime in the back half of this year. Who is Uni-Select? Well, as highlighted on page 6, it is a wholesale distributor of automotive aftermarket products with approximately $1.7 billion of revenue, over 400 branch operations, and 5,200 employees engaged in 3 primary lines of business. The first, FinishMaster, which is a leading distributor of automotive paint and allied products that are primarily sold into the collision repair industry in the United States and Canada. This business had $722 million in revenue in 2022 and is literally a hand-in-glove fit with our North American Wholesale segment. Second, Canadian Automotive Group, which is a leading wholesale distributor of automotive aftermarket mechanical parts operating across Canada with both a two-step and three-step delivery model. This business had revenue of approximately $600 million in 2022. As you all know, LKQ is the largest distributor of these part types in Europe, we are confident we can create benefits from the transaction by working collaboratively. Lastly, GSF, which was formerly referred to as The Parts Alliance, is a wholesale distributor of automotive aftermarket mechanical parts in the U.K. Given the market presence of LKQ Euro Car Parts operations in the U.K., that business will need to be sold to be responsive to the regulatory framework in the U.K. Why are we so excited about the transaction? As noted on page 7 of the slide deck, the strategic fit is compelling as FinishMaster and the Canadian Automotive Group will enhance the existing LKQ businesses and allow us to continue to achieve profitable growth. FinishMaster brings new brands and customers that will complement LKQ's current paint distribution operations. This will allow us to serve a broader array of customers with a broader array of products and with a better level of service. The integration risk here is minimal. The Canadian Automotive Group gives us a scaled entry into the attractive Canadian automotive mechanical parts market with the number 2 wholesale distributor. Again, we are confident we can leverage our experience in Europe to add value. While Uni-Select is a large company, in many ways, this is more like a big tuck-in acquisition, given the extremely close fit with our existing businesses. As mentioned, there are readily identifiable cost synergies of $55 million that will drive favorable returns on investment over time. Rest assured, we will continue to focus on our operational excellence programs, and we will be able to pull Uni-Select's business into those programs as well. Both FinishMaster and the Canadian Automotive Group will become part of our North American Wholesale Segment. As you know, Justin Jude, our President of North America, has done a terrific job over the past 45 years driving operational improvements and a significant margin expansion in our North American Segment, and he will lead the charge on the integration of these businesses into LKQ. Speaking of Justin, he is now going to take a few minutes to review the FinishMaster in CAG businesses. Thank you, Nick, and turning to slide 8, please. As we integrate FinishMaster, taking their strength as a leading automotive paint distributor and really combining with our unmatched distribution network, we will provide an even greater experience for our customers. LKQ has a strong team that has many integrations under their belt. We will ensure the integration is smooth, non-disruptive, all while delivering value creation to our shareholders. We feel the Canadian Automotive Group's position as number 2 in the market, along with the access to the parts supply network from our European operations that Nick mentioned, we'll be able to drive strong procurement synergies as well as revenue growth. I couldn't be more excited about welcoming these two companies to the LKQ family. Turning over to slide 9. You know, FinishMaster, they have a strong reputation as a paint supplier to both MSOs and the traditional body shops. A combination of FinishMaster and LKQ will provide an even broader product offering, better fill rates, and a customer service level that will be hard to replicate in North America. The unity of our two companies will continue to transform the automotive paint distribution business for North America for years to come. Our two companies, jumping to slide 10, it shows that we will surpass $1 billion in paint sales and related products that are used by body shops across North America. Now, today, LKQ delivers parts to the vast majority of body shops with limited access to paint. Taking the expert knowledge that FinishMaster brings on paint, their strong supplier partnerships, and their expanded product offering will allow us to increase our sales into this existing customer base. Our MSO partners will see an improved fill rate and improved service level, and we will be able to do this at a lower cost to serve, as well as adding another parts to the truck, or in this case, I guess, a can. Moving on to slide 11. We are excited that the Canadian Automotive Group will also be part of the portfolio as well. LKQ has always looked in to expand into adjacent markets that will give us the opportunity to further diversify or give us the avenues for revenue growth. With the aging car part growing in Canada, we see the hard parts market in Canada will still have a steady growth for years to come. Being able to leverage our procurement size in Europe with the scale of Canadian Automotive Group's footprint as the number 2 distributor in Canada and the fact that the market is still highly fragmented will give LKQ a great runway for growth. I'll now turn it over to Rick Galloway. Thanks, Justin. All right, if we turn to slide 12. Europe, our largest business segment, purchases over $3 billion of these products annually. Strong vendor relationships and significant volumes will allow us to leverage our procurement expertise to optimize the combined spending between LKQ and the CAG segment. We will look to expand product offerings and rationalize products within categories as we drive additional solutions to CAG customers. Turning to slide 13. We view Uni-Select's FinishMaster segment as one of the strongest paint distributors in North America, as Justin mentioned. We're excited to welcome them into the LKQ team. We believe LKQ provides our customers and the industry with significant cost advantages with our existing breadth and depth of inventory. With this combination of businesses, we believe we can further improve the cost to serve both LKQ and Uni-Select customers, as many of those customers overlap. While LKQ has minimal sales of paint to the existing MSOs, we are already delivering various products to a majority of their locations daily. This combination will allow our joint companies to better serve the customer while minimally impacting the cost of delivery. The majority of the procurement synergies I already discussed on slide 12. In addition, LKQ has a long history of successfully integrating businesses, including public companies, to reduce duplicative costs between the combined businesses. Transitioning to slide 14. Combining our two businesses is likely to uncover several additional revenue and margin expansion opportunities. We will likely uncover more as we work together more closely. We've identified six areas we will focus on as we close on the transaction. LKQ provides tens of thousands of remanufactured engines, transmissions, and many other products, and CAG will provide a more efficient method to get these products to the end consumer. With LKQ's breadth of product offerings, we believe there is additional opportunity to enhance the CAG private label offerings, as well as increased vehicle and branded European product offerings to the Canadian market. CAG will provide an additional avenue to deliver LKQ collision parts, as well as continue to build on the existing CAG Bumper to Bumper brand through additional acquisitions. Now finishing on slide 15. LKQ is very proud, and we remain committed to maintaining our investment-grade credit rating. While this is a sizable transaction, we don't believe this transaction puts our IG rating at risk, as we do not believe our debt-to-EBITDA will ever get to the 3-time EBITDA that the agencies have disclosed as a key metric. In addition, we remain committed to staying below 2 times leverage and will emphasize our M&A discipline. While this is a larger deal, we felt the fit was right, and thus, we are willing to go above the 2 times for a period. We will still look at tuck-in acquisitions, but will likely pass on large deals until leverage comes back down. We will reprioritize our excess cash to debt repayment until we achieve our 2 times target, and we expect to be below 2 times within 18 months after closure of this acquisition. With that, I will turn the call back over to Nick for any final comments before we open up the call for questions. Thanks, Rick. Before we get to the formal Q&A, I will answer a question that may be on your minds. That is, after 5 years of intense focus on operational excellence, does this transaction reflect a new strategic focus and a swing back to emphasize large M&A transactions? The answer is a definitive no. While this is a larger transaction, it is also a bespoke opportunity. What I mean by that is, given the businesses that comprise Uni-Select, this is a tailor-made transaction for LKQ. As I mentioned in my formal comments, we think about this as a large tuck-in acquisition that will seamlessly meld into our existing operations. We will continue to drive the key objectives across LKQ, including profitable revenue growth, enhanced margins, strong free cash flow, investing in our business, having a balanced capital allocation strategy, and attracting and developing great talent. Operator, you can now open the call to questions. The floor is now open for your questions. To ask a question this time, please press star one on your telephone keypad. If at any point you'd like to withdraw from the queue, please press star one again. You'll be provided the opportunity to ask one question and one further follow-up question. We will now take a moment to render our roster. Our first question comes from the line of Scott Stember, Roth MKM. Please proceed. Good morning, guys. Thanks for taking my question. Good morning, Scott. When looking at the total, some of the key figures here on slide 6, the $1.7 billion sales and the EBITDA margins, how do some of these metrics change, particularly on the EBITDA margin side, once you subtract the U.K. business? The UK margins are pretty commensurate with the overall corporate margins, so there won't be a big shift there, Scott. What there will be, obviously, that does not include the benefit of the $55 million of synergies. We believe that once we're all together as one family, we'll be able to drive the Uni-Select margins north. Got it. Just lastly, on the FinishMaster and CAG, could you talk about, well, the growth rates historically that this business has seen in particularly the last couple of years? Yeah. Thanks, Scott. What we've seen with COVID in particular, there was a little bit of a backwards movement in from 2019 to 2020. Since then, there's been pretty significant growth in both CAG and the FinishMaster business. We think the trajectory is pretty solid as we look at both businesses, where we're looking at, you know, relatively, you know, call it 2%-4% growth rates over the next roughly 10 years is what we're kinda looking at. Those are really, market growth rates. Right. You know, we believe, as we said in our formal comments, that we'll be able to accelerate the overall growth on both the FinishMaster and CAG side, due to the ability to work together with the existing LKQ businesses in better serving our customers. Got it. Thanks, guys. Congratulations. Thank you. Yep. Our next question comes from the line of Daniel Imbro from Stephens Inc. Please proceed. Yep. Hey, good morning, guys. Congrats on the deal. Good morning, Daniel. I wanted to start with just a financial question, Rick. I guess on the synergies, you guys said $55 million run rate by year 3. I didn't hear any discussion around the kind of pace of capturing those. Should we expect this to be kind of linear, years 1, 2, and 3? Is there more of a hockey stick kind of in year 3 as you plan to capture the procurement, I think you said procurement, SG&A, and one other bucket of main synergies? Can you kind of walk through the expected timeline of those three different buckets of synergies? Yeah. I think it's important to know, you know, we're unclear when it'll actually close. Assuming a 12-month after closure- Mm-hmm. You know, the way to probably think about this is more like the $15 million-$20 million in year one, and then the bulk of the remainder happens in year two with a little bit of lag into year three. I think by the end of year two, our objective would be to be, you know, pretty significantly close on that, you know, call it upwards of $45 million or so of synergies by the end of year two, and then, you know, remainder gets you the last 10 in year three. Thank you for that color. Justin, maybe thinking about the CAG business you guys are acquiring. I think in the slides you said the market's gonna grow, call it 3-ish% the next decade. Can you provide some background color, and forgive the ignorance, you know, is there a reason this business never expanded into the U.S.? Like, strategically, could it expand into the U.S., maybe accelerate that growth and kind of become a player in the U.S. mechanical aftermarket parts distribution? Yeah. Historically, on the CAG's revenue, they've outperformed the market, looking over the last three to four years. We still see large opportunities to expand into Canada. At some point, could that give us a footprint to get in the U.S.? Possibly, but we're really focused on going after the Canadian market, where we see great trends. I mean, as I mentioned earlier, aging car park, quite a bit of fragmentation that still exists. We wanna concentrate on that market with that team up there and continue to grow that business in Canada. Sure. I'll leave it there too. Thanks so much, guys. Thanks, Daniel. Thanks, Daniel. Our next question comes from the line of Craig Kennison from Baird. Please proceed. Hi. Good morning. Thanks for taking my question as well. Wanted to ask about the supplier base for CAG. What's the overlap between those suppliers and the suppliers to your European operations? I'm curious about your ability to extract synergy there. Great question, Craig, good morning. Obviously we've looked and studied this very hard. You know, a good portion of the synergies are procurement, where we've been able to actually match up on a SKU-to-SKU basis, supplier-to-supplier basis. We do believe there is good overlap in the supplier base. We think we will have the ability to expand their private label offerings, based on who supplies us in our European theater. There will be close kind of communications and working together between our procurement team over in Europe and the procurement team at CAG. We're very optimistic about our ability to create value, you know, for our shareholders. As a follow-up, how do CAG's payable terms compare to what you're able to do in the UK or Europe? Yeah. You know, one of the things that we're into with CAG is they do have a supplier vendor financing program that we believe we'll be able to enhance that and go larger than what CAG has been able to achieve thus far just due to the size of LKQ and the ability for us to enhance that. I think there is, Craig, upside on the payable side of the business for CAG to improve to get to the levels that we have over in Europe. Okay. Thank you. Yep. Thank you. Our next question comes from the line of Bret Jordan from Jefferies. Please proceed. Hey, good morning, guys. Good morning, Bret. Morning, Bret. On the sale of the U.K. asset, I guess, have you gone down that path and have a buyer? I guess, are we to expect that you probably sell it for less than the multiple paid for Uni-Select, given the fact that you're probably viewed as a forced seller? I guess, how do we look at that U.K. asset divestiture? Nothing has happened yet, Bret, 'cause we just signed the definitive agreement to buy Uni-Select. You know, we're anticipating that as we work through the antitrust review with the CMA, which is the regulatory body over in the UK, that we will need to sell the business given the market share that ECP already has. No, there are no buyers lined up. We are going to run a very competitive process, and we think it's a very attractive asset in terms of its size, its scale, profitability. It's fully independent. There's no real linkages back to the Canadian headquarters. It's an asset that's very easily separated from the mothership, if you will. We are going to hire a banker. Actually, Uni-Select will be hiring a banker, and we will come to market just as quickly as we can. You know, valuation will be based on, you know, what the market will bear and the competitive dynamics we can create through the sale process. Okay. Last I checked, I think that Parts U.K. had, what, sort of high single-digit market share over there? Yes. Okay. A question on the CAG business. Could you talk about the distribution? I think years ago, they were sort of transitioning between maybe more independent store base to more company-owned store base. You know, could you give us a feeling for where they are now and sort of what the strategy around the actual, you know, to the customer distribution model looks like? Yeah. You are correct, Bret. In the past, they were heavily three-step, a lot of job or a lot of members. They still support that business. LKQ would continue to support that business as opportunity for growth and trying to gain share of wallet with those customers, especially as Nick talked about with private label access. In addition, they have added some stores. They've, they've shifted some more focus onto the two-step or to the actual storefronts, delivering right to the shops. LKQ's interested in expanding the two-step as well as the three-step when the opportunity arises. They have done that shift, and I think it's about maybe 1/3 two-step and 2/3- Yeah. -three-step. I'd remind you, Bret, that when we went into the Netherlands, when we bought the, what's today the Fource business, that was entirely a three-step distribution model, and we very successfully were able to transfer that. Today, it's 70%-75% two-step, and the balance just three-step. We've got experience in making the transformation. Our goal up in Canada is to support all of the customers, regardless of whether it's an independent shop, where CAG will deliver direct or to support the job or community that will be distributing parts ultimately into the end market. Okay. Most of FinishMaster's revenues are U.S.-based, right? I mean, they do more south of the border than north. I guess, what about that business was proprietary that you couldn't home grow it versus acquire it? Yeah. LKQ sells the main brands of paint, but we're very limited in the markets for which we can sell that. As I mentioned on my call, you know, we're delivering almost every shop, maybe not every, but 90% of our shops every day, but we don't have the opportunity to offer those brands. FinishMaster will bring those brands to us. They've got the expertise. I mean, they are truly a top-notch paint distribution business with strong sales force and strong relationships with suppliers. We take that combination of their offerings and we combine it with LKQ's network. We'll be able to, you know, add more revenue growth into our existing customer base than we can't offer that today. Our final question comes from Michael Hoffman from Stifel. Please proceed. I gotta love these conference call services. I can't always get there. Michael Hoffman. Good morning, Michael. Good to talk to you. How are you guys? Rick, on the leverage, your comment in your script, I assume what you mean is you're not gonna do buyback, you're not gonna do other M&A. That means cash piles up this year. Cash piles up on a net debt basis. You get faster to that back to 2 times is my gut 'cause I'm not spending on buyback. Is that the right way to think about this? Yeah. And, you know, as we talked last week, the way we modeled it within our guidance is using that excess cash for debt pay down. The model should work the exact same as what we had projected before on our guidance. Right. You're gonna end this year even less levered, and then you add this transaction and it just, I get to where you're going faster is what it seems like. Yeah. You're spot on. That's exactly the way we're thinking of it. Okay. Okay. On margins, can we talk about the comparison to LKQ's existing round numbers, $300 million of FinishMaster like versus the FinishMaster, which is in the sort of 7%-7.5% range? You know, what can that combined go to, given that all of North America is supposed to be sort of run rate 17.5%? The same thing for the Canadian Automotive Group versus LKQ's Mechanical. How do they compare, can I get to LKQ-like margins? Michael, as you know, we don't provide product level margin detail in any of our disclosures. What I can assure you is our existing paint business is not running at a 18% margin that the total North American segment is. The FinishMaster margins, as I indicated, their whole company is in the high single digits. The paint margins are in that vicinity, but we will be able to drive that north with the synergies and the cost savings that we're gonna be able to get. You know, there's public disclosure out there on FinishMaster's hard parts margins up in Canada 'cause that's a separate segment. That's kind of low double digits. Again, that low double-digit margin is pretty consistent with what's available in the wholesale aftermarket parts distribution industry. You know, a couple of the players out there have higher margins. That's due to their retail operations. In wholesale, kind of that low double digits is a good market rate. Again, we're gonna try and drive the margins as north as we can, but nobody should expect that we're gonna be able to take their revenue and drive it to an 18% margin. That's pretty unique given our standing in the North American marketplace. Okay. The other interpretation, though, is because of a mix shift, the 17.5% comes down. Absolutely, the 17.5 will come down. What we're focused on is creating value through EBITDA dollars, you know, the margins will come down a little bit, exactly as you said, because of mix. The EBITDA dollars will go up pretty dramatically, and that will provide the cash flow we need to continue to grow our business. That will keep you in that 55%-60% free cash conversion still too? Absolutely, yeah. Okay. All right, cool. Thanks. Thanks, Michael. Okay. Any other questions before we bring the call to a close? If there are no more questions, I would now turn the call over to Dominick Zarcone for closing remarks. Okay. Well, again, I wanna thank everybody on the call for joining us today. I know you had short notice to dial in, but we are really excited about this opportunity. We think it's going to be a terrific for LKQ customers. We think it's gonna be very beneficial to the combination of LKQ and Uni-Select employees. Ultimately, it will drive value for all of our shareholders, which is, you know, first and foremost on our minds. It's gonna take some time to get to closure. You can never get these transactions done quick enough, but we need to follow the normal processes. We'll come back prior to closing to adjust our guidance. At that point in time, we'll know how much of 2023 will be left and what we can expect as far as the financial impact for this year. Until then, we again thank you for your time and attention and look forward to continuing our dialogue with the investment community about LKQ. Thank you, ladies and gentlemen. This does conclude today's call. Thank you for your participation. You may now disconnect.