Lithia will maintain a 16.7 % stake in Pinewood Technologies as soon as the transaction closes, which is anticipated within the fourth quarter or first quarter of 2024, DeBoer mentioned. Lithia then will start to transform its current U.Ok. dealerships — a majority of which it acquired in March when it purchased Jardine Motors Group — to the Pinewood system.
Lithia additionally plans to kind a three way partnership with Pinewood to finally convey a DMS to the U.S. and Canada.
“Together with Pinewood, Lithia is going to leverage its assets to build a North American software solution, DMS solution to bring to market over the next three to five years,” DeBoer informed Automotive News. “We don’t know the exact timing, but we’re working on that together. That’s a massive TAM [total addressable market] to be able to expand the profit margins of what Pinewood is.”
DeBoer described Pinewood as a worthwhile software program firm that’s cloud based mostly and tech-savvy.
All informed, Lithia mentioned the Pendragon acquisitions are anticipated so as to add $4.5 billion in annual income, the most important thus far of any of its blockbuster purchases, DeBoer mentioned. Once the deal closes, Lithia estimates its annualized revenues to be over $38 billion, getting it nearer to its objective of $50 billion annualized income by the tip of 2025.
Lithia mentioned the partnership and acquisition of Pendragon’s dealership and fleet enterprise will price $350 million and that it plans to finance the transaction utilizing current on-balance sheet capability.
Pendragon CEO Bill Berman, the previous AutoNation COO, will keep on as CEO of Pinewood, DeBoer mentioned.
“The launch of Pinewood as a standalone company is a unique and exciting opportunity to create a best-in-class product for customers, which we can market globally and drive substantial value for our shareholders and in Lithia we have the perfect partner to help accelerate Pinewood’s push into the hugely attractive North American DMS market,” Berman mentioned in a press release.
For Lithia, a accomplished Pendragon transaction can be a very long time coming. In August 2022, there have been reviews that named Lithia because the unidentified bidder in a failed deal to purchase Pendragon. DeBoer confirmed that Lithia had discussions then with Pendragon, including that his firm backed away. Now, by including Pendragon, Lithia has every part it wants within the U.Ok., DeBoer mentioned.
“It does round out our footprint, whereas Jardine is primarily Midlands and London,” DeBoer mentioned, referring to the group it purchased in March. “This adds a lot more north of London, in the eastern part of the Midlands, as well as a fairly sizable expansion into the northern part of the country and Scotland.”
Lithia, of Medford, Ore., ranks No. 1 on Automotive News‘ listing of the highest 150 dealership teams based mostly within the U.S., retailing 271,596 new automobiles in 2022. Lithia’s gross sales figures embrace dealerships exterior of the U.S.
Source: europe.autonews.com