Kwik-Fit Group has confirmed earlier reports that PAI Partners has sold the fast fit chain to the Japanese Itochu Corp. for £637 million. The purchase price is said to include £457 million of debt, which will be paid off in full at completion, according to a Financial Times report. The deal is reportedly Itochu’s biggest investment in the U.K. and follows its acquisition of Stapleton’s in 1994. The company is also already talking about the potential synergies between the two businesses.

“Through this acquisition, Itochu will strive to enhance its tire business by leveraging Kwik-Fit’s network and strong brand and STS’ strong logistics capability and its management know-how of retail operations to generate synergies among all tire-related businesses,” Itochu said in a statement.

Ian Fraser, chief executive of Kwik-Fit, is expected to stay in post following the purchase. He commented, “It has been a pleasure working with PAI partners over the years. Their support has been an important factor in our continuing success. We now look forward with enthusiasm to our partnership with Itochu and the next stage of Kwik-Fit’s development. Despite challenging economic conditions, Kwik-Fit has continued to increase sales and deliver strong operating profits and with the financial strength and synergies of its new owners Itochu, is well positioned for further growth.”

The agreement is subject to approval by the European Competition Authorities and successful completion of the consultation process with French Works Council.

According to news reports, U.S. private equity firm Clayton Dubilier & Rice, which owns car rental company Hertz, and Bridgestone, which was a bidder when PAI bought Kwik-Fit in 2005, are also said to have been considering bids. In January the Financial Times suggested Clayton Dubilier & Rice was the only private equity firm still bidding and was working on an offer of £650 million for Kwik-Fit.

With revenues of over £25 billion and bases in 74 countries, Itochu has interests ranging from textiles and machinery to aerospace, electronics and energy. As well as Stapleton’s Tyre Services, which has a network of over 100 centers of its own, in addition to a leading wholesale position in the U.K., the business also owns Reifen Gundlach, a well-known German tire wholesale operation.

Kwik Fit was established in 1971 and this year celebrates its 40th anniversary. (Tyres & Accessories)