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Lithia & Driveway: A Game-Changing Partnership with Pinewood Technologies to Revolutionize Fleet Management and UK Motor Divisions

by Tech Desk
2 minutes read
Lithia & Driveway: A Game-Changing Partnership with Pinewood Technologies to Revolutionize Fleet Management and UK Motor Divisions

According to a recent announcement, Lithia & Driveway (NYSE: YOUNG GUY) is set to enter into a strategic partnership with Pinewood Technologies and acquire the UK motor and fleet management divisions of Pendragon plc. This move will solidify Lithia’s presence in the UK market and is expected to generate over $4.5 billion in annual revenue.

The transaction involves Lithia acquiring Pendragon’s engine division and vehicle management division in the United Kingdom. As part of this agreement, Pendragon’s existing business, including the Pinewood DMS platform, will continue to be listed on the London Stock Exchange under the name Pinewood Technologies plc. It will operate as a software-as-a-service (SaaS) business with its profitable Pinewood Distributor Management System.

Through this acquisition, Lithia’s UK operations will enhance their digital capabilities by adopting the Pinewood technology platform across all locations. Additionally, Lithia and Pinewood Technologies will collaborate on developing automotive technology solutions for the North American market through a joint venture. Upon completion of the transaction, Lithia will also acquire a 16.7% stake in Pinewood Technologies.

This partnership with Pinewood Technologies provides Lithia with several benefits. Firstly, it diversifies their business by adding Pendragon Vehicle Management (PVM), which is a highly profitable fleet management services business. This move lays the foundation for global growth in this sector.

Furthermore, this transaction emphasizes Lithia’s commitment to investing further in the evolving UK automotive industry. They aim to offer customers omnichannel and e-commerce options that allow them to shop at their convenience.

The acquisition of Pendragon’s engine and vehicle management divisions complements Lithia’s existing UK brand and geographic footprint following their investment in Jardine Motors Group earlier this year. Once completed, these combined businesses are projected to have a new vehicle market share of 3.6%. Neil Williamson, UK President of Lithia, will oversee the operations of the combined business.

Bryan DeBoer, President and CEO of Lithia & Driveway, expressed his excitement about this strategic partnership. He believes it aligns with their long-term growth strategy and presents significant potential for global expansion. This acquisition also strengthens their existing OEM relationships and contributes to their goal of achieving $2.00 EPS per $1 billion of revenue going forward.

Bill Berman, CEO of Pendragon PLC, also expressed his confidence in Lithia’s ability to capitalize on the progress made by Pendragon. He sees this as a unique opportunity to create a best-in-class product for customers that can be marketed globally. Moreover, he believes Lithia is an ideal partner to help Pinewood Technologies enter the North American DMS market.

The cash consideration for this strategic partnership and acquisition amounts to approximately $350 million (£280 million). Once completed, Lithia’s estimated annualized revenues will exceed $38 billion. The transaction will be financed using existing on-balance sheet capacity.

The inference, Lithia & Driveway’s strategic partnership with Pinewood Technologies and acquisition of Pendragon’s UK motor and fleet management divisions marks a significant milestone in their growth strategy. With this move, they aim to enhance their digital capabilities, diversify their business portfolio, expand their brand and geographic footprint, and strengthen their position in the UK automotive industry.

Source: (Lithia Motors)(–driveway-to-form-strategic-partnership-with-pinewood-technologies-and-acquire-pendragon-plcs-fleet-management-and-uk-motor-divisions-301929883.html)


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