“I think the structure of the deal is interesting in the sense they’re taking kind of an equity stake in the remaining business,” Imbro told Automotive News. “It feels like a bit of a win-win. It feels like they got the dealerships for what seemed to be a pretty good price. And it also feels like it gives the remaining business, the tech business, a nice foothold into North America, which should help that business grow faster through Lithia.”
By adding Pendragon, Lithia has just about everything it needs in the U.K., DeBoer said. He said the Pendragon brands are not brands that were heavy in the Jardine acquisition, such as Audi. There is some overlap among Mercedes-Benz, BMW and Porsche, but DeBoer emphasized that Pendragon’s locations, unlike Jardine’s, are mostly north of London, in the eastern part of the Midlands, as well as in Scotland.
A combined Jardine-Pendragon platform would represent a 3.6 percent new-vehicle market share in the U.K. — nearly two and a half times better than Lithia’s market share in the U.S., DeBoer said. To be sure, Lithia plans to divest some stores in the U.K., he added, without going into specifics.
Pendragon has a brand that would be new for Lithia, DeBoer said: China’s BYD. Pendragon has opened at least two BYD stores so far and is in the process of opening more outlets, he said.
Despite the heightened activity in the U.K., DeBoer said Lithia’s domestic plans for continued acquisitions have not changed.
In June, he estimated Lithia would acquire around $4 billion of added revenue from domestic acquisitions in 2023. The retailer went on to buy a majority of Virginia’s Priority Auto Group that month, as well as a Ford store near Atlanta. In July, Lithia bought a Honda dealership in Texas.
Following the Ford store purchase, Lithia said it had acquired U.S. dealerships this year that it expected to generate an estimated $3.5 billion in annual revenue. Lithia also divested some dealerships this summer.
“I think, domestically, it’s an active market still,” DeBoer said. “We believe that there’s going to be other transactions. This just makes it a little easier to pick and choose the right transactions to really round out the North American footprint. The Midwest is still light. The Southeast, or our Region 6, is still growing. But we’ve still got a lot of places outside Florida that we don’t have really any presence.”
