On Monday, September 18, Lithia Motors announced that it intends to enter a strategic partnership with Pinewood Technologies and acquire the UK motor and fleet management divisions of Pendragon plc, the UK’s third-largest automotive dealership group for $310 million USD.
This acquisition will round out Lithia’s presence in the UK market and is expected to generate over $4.5 billion USD in annual revenues.
As part of the agreement, the ongoing Pendragon business, comprised of the Pinewood DMS platform, will remain listed on the London Stock Exchange under the name Pinewood Technologies plc and will become a pure-play software as a service (SaaS) business.
Lithia’s UK operations will grow its digital capabilities by adopting the Pinewood technology platform across all locations. Additionally, Lithia Motors and Pinewood Technologies, through a joint venture, will co-develop automotive technology solutions to capitalize on the North American market opportunity.
Lastly, Lithia will take 16.7% ownership in the remaining Pinewood business at the completion of the transaction.
“The strategic partnership with Pinewood Technologies and acquisition of Pendragon’s UK motor and vehicle management divisions is a massive step in delivering on our longer-term growth strategy,” said Bryan DeBoer, Lithia & Driveway President and CEO in a press release. We are excited about the great potential in Pinewood’s offering and envision our strategic partnership to further expand this SaaS business globally.”
The transaction underlines Lithia’s plans to invest further in the evolving UK automotive industry. Pendragon’s UK motor and vehicle management divisions are complementary to Lithia’s existing UK brand and geographic footprint following the investment in Jardine Motors Group (“JMG”) in March 2023 with the combined platform representing 3.6% new vehicle market share.
“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,” added Bill Berman, Chief Executive of Pendragon PLC.
Post-completion the combined business will report to Neil Williamson, Lithia’s UK President who has led the rapid and seamless integration of JMG since the investment in March 2023 and the addition of two BMW stores in Maidstone and Tunbridge Wells in August 2023.
