Lithia & Driveway expands UK presence with Pendragon deal

MEDFORD, Ore. - Lithia & Driveway (NYSE: LAD) has finalized its acquisition of the UK motor and fleet management divisions of Pendragon PLC, a leading automotive dealership group in the United Kingdom. This acquisition is a strategic move to enhance Lithia & Driveway's digital capabilities and expand its market presence in the UK.

The transaction, which was completed today, includes a partnership with Pinewood Technologies Group PLC, formerly known as Pendragon. Lithia & Driveway will integrate Pinewood's dealer management software across its UK operations and co-develop automotive technology solutions aimed at the North American market through a joint venture. Pinewood Technologies will continue to operate as a standalone software-as-a-service (SaaS) business on the London Stock Exchange.

Lithia & Driveway's President and CEO, Bryan DeBoer, stated that this marks the beginning of a new chapter in the company's long-term growth strategy, with the goal of capitalizing on the significant potential of this partnership. The acquisition is expected to add approximately $4.5 billion in annual revenue for Lithia & Driveway and marks its entry into the fleet management space.

Neil Williamson, Lithia's UK Regional President, highlighted the strategic benefits of the investment, including expanding the company's footprint into Wales and Scotland and increasing its brand presence in the UK. The integration of Pendragon Vehicle Management and the move to a unified technology platform with Pinewood positions Lithia as a diversified and innovative player in the UK automotive market.

The financial details of the transaction were not disclosed in the press release statement. However, the move is seen as a continuation of Lithia & Driveway's strategic design outlined in 2020, aimed at growth and expansion in the UK market.

This news is based on a press release statement from Lithia & Driveway.

As Lithia & Driveway (NYSE: LAD) embarks on a transformative acquisition to bolster its presence in the UK market, investors are keenly observing the company's financial health and market potential. According to InvestingPro data, Lithia & Driveway boasts a robust market capitalization of $8.11 billion, indicating the company's significant size and influence within the industry. The company's commitment to shareholder returns is evident, with a track record of raising its dividend for 10 consecutive years, and maintaining dividend payments for 14 consecutive years, showcasing its financial stability and investor-friendly approach. This is further supported by a low P/E ratio of 7.91, suggesting that the company's shares might be undervalued relative to its earnings.

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Moreover, Lithia & Driveway's revenue growth over the last twelve months, as of Q3 2023, stands at an impressive 10.03%, signaling strong sales performance and potential for future expansion. While the company operates with a significant debt burden, it remains a prominent player in the Specialty Retail industry, with analysts predicting profitability for the current year. Investors interested in digging deeper into Lithia & Driveway's financials and market prospects can find additional insights and tips on InvestingPro, which currently lists 13 more InvestingPro Tips for the company.

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