[Letterhead of FMV Opinions, Inc.]
Exhibit 99.2
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February 27, 1997
The Board of Directors
Keystone Automotive Industries, Inc.
700 East Bonita Avenue
Pomona, California 91767
RE: NORTH STAR PLATING COMPANY ACQUISITION
Gentlemen:
You have asked us to provide a written opinion (the "Opinion") to you in
your capacity as members of the Board of Directors of Keystone Automotive
Industries, Inc. ("Keystone") as to whether the terms and conditions of the
contemplated acquisition of North Star Plating Company ("North Star") by
Keystone is fair to Keystone and its shareholders from a financial point of
view. The proposed acquisition consists of a stock pooling arrangement whereby,
among other things, Keystone will issue 2,450,000 shares of its Common Stock to
the shareholders of North Star in exchange for all of the outstanding capital
stock of North Star (the "Merger"). The terms of the Merger are more fully set
forth in that certain Agreement and Plan of Merger by and among Keystone, North
Star, North Star Acquisition, Inc., Ronald G. Brown, and Kim D. Wood, dated
December 6, 1996 (the "Merger Agreement").
We have specifically been asked to advise Keystone's Board of Directors
respecting the fairness of the terms and conditions of the Merger to Keystone
and its shareholders from a financial point of view.
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In arriving at the conclusion set forth herein, we have, among other
things:
(i) reviewed the Merger Agreement, including the schedules and exhibits
thereto;
(ii) participated in discussions among representatives of Keystone and
North Star and their financial and legal advisors;
(iii) reviewed the Proxy Statement/Information Statement/Prospectus dated
the date hereof relating to the Merger;
(iv) reviewed certain publicly available financial statements, both
audited and unaudited, of Keystone, including those included in its
Prospectus dated June 20, 1996, and its Quarterly Reports on Form
10-Q for the periods ended June 29, 1996, and September 27, 1996;
(v) reviewed certain financial statements, both audited and unaudited,
of North Star, including those dated September 30, 1992, September
30, 1993, September 30, 1994, September 30, 1995 and September 30,
1996;
(vi) reviewed certain financial statements and other financial and
operating data concerning Keystone and North Star prepared by their
respective managements;
(vii) reviewed certain financial forecasts of Keystone and North Star
prepared by their respective managements and made inquiries of
representatives of Keystone's and North Star's managements as to the
expected future financial performance of Keystone and North Star,
respectively, on a stand-alone basis and giving effect to the
Merger;
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(viii) discussed the past and current business operations, results of
operations, financial condition and future prospects of Keystone
and North Star with certain members of their respective
managements;
(ix) reviewed reported market prices and historical trading activity of
Keystone's Common Stock;
(x) reviewed the financial performance of Keystone and North Star and
compared such financial performance of Keystone and North Star,
together with stock market data relating to Keystone's Common
Stock, with similar data available for certain other companies
that we have deemed similar from an investment perspective and
certain of their publicly traded securities;
(xi) reviewed the financial terms of certain other business combinations
involving Keystone and North Star, and to the extent publicly
available, of certain recent business combinations and change of
control transactions involving other companies that we have deemed
similar from an investment perspective; and
(xii) conducted such other studies, analyses, and examinations as we have
deemed appropriate.
In arriving at our opinion, we have relied upon the accuracy and
completeness of the financial and other information provided to us by Keystone,
North Star and their respective representatives and obtained from publicly
available sources which we considered in our review, and have not independently
verified such information.
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Our opinion is based solely upon the information available to us and the
economic, market, and other circumstances as they exist as of the date hereof.
Events occurring after the date hereof could materially affect the assumptions
used in preparing this opinion. We have not undertaken to reaffirm or revise
this opinion or otherwise comment upon any events occurring after the date
hereof.
We are not expressing any opinion herein as to the prices at which shares
of Keystone's Common Stock outstanding prior to the Merger or issued in the
Merger may trade at any future time. Our opinion as expressed herein is
expressly limited to the fairness, from a financial point of view, of the terms
and conditions of the Merger to Keystone and its shareholders. We have been
retained on behalf of the Board of Directors of Keystone, and our opinion does
not constitute a recommendation to any holder of Keystone's Common Stock as to
how such holder should vote with respect to the Merger Agreement at any meeting
of holders of Keystone Common Stock. We hereby consent to the inclusion of this
opinion as an exhibit to any proxy or registration statement distributed in
connection with the Merger.
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Based upon the foregoing and subject to the qualifications expressed
herein, it is our opinion that the terms and conditions of the Merger are fair
to Keystone and its shareholders from a financial point of view.
Sincerely,
FMV Opinions, Inc.
/s/ FMV Opinions, Inc.