Canadian dealership group Pfaff Automotive Associates, of Toronto, has been acquired by U.S.-dependent Lithia Motors, confirming news of the imminent offer 1st noted by Automotive Information Canada in July.
Money conditions of the transaction made public Tuesday were being not disclosed. But, a Pfaff spokesman said the Canadian group retains an undisclosed fairness stake in the operation, noting Lithia owns the greater part stake.
It marks Lithia’s to start with international acquisition as the next-largest U.S. dealership group also targets a objective of 500 domestic locations.
Pfaff, headquartered in Toronto, operates 16 dealerships throughout Canada — 11 of them in the Larger Toronto Region, the most significant market in the state. It also has retailers in Vancouver and Calgary. The Canadian dealerships are expected to generate a lot more than US$1 billion in annualized revenues for Lithia, headquartered in Medford, Ore.
“Canada has been our prime focus on for development outside of the United States with its equivalent business methods and a marketplace opportunity of 5 million new and utilised cars marketed yearly,” Lithia CEO Bryan DeBoer mentioned in a statement. “Past its dimensions, Pfaff has an fantastic management staff, and its spots supply an suitable hub for more expansion.”
DeBoer praised Pfaff’s ideal-value initial technique and captive in-residence leasing selection, expressing Pfaff “perfectly aligns with our know-how-enabled on the internet choices.”
The acquisition of Pfaff can make Lithia the 2nd publicly traded dealership team functioning in the Canadian market place. AutoCanada, centered in Edmonton, Alta., was the sole public dealership group in Canada.
The Pfaff brand will stay, and Chris Pfaff, whose father Hans started the business in 1964, will proceed to serve as president and CEO. A Pfaff spokesman claimed the total Pfaff management crew will continue to be on board to run the brand name.
The offer also means Lithia will provide its Driveway omnichannel digital retailing system north of the border.
DeBoer formerly mentioned that early learnings from Driveway, rolled out a person calendar year back, exhibit the opportunity for the platform to dominate each “domestically and internationally.”
Omnichannel refers to know-how and procedures aimed at offering a seamless shopping for working experience for customers whether they shop on the internet, in-store or equally.
Pfaff said in a assertion there presently is not a “nation-extensive, e-commerce player in Canada.”
“[W]hich is why we believe that this partnership will supply a 1st-mover advantage in acquiring extra locations and deploying [Lithia’s] revolutionary, digital platforms throughout this nation,” Pfaff explained. “This partnership is borne out of a romance that spans 5 decades, and we are confident that the cultural alignment involving our corporations will make this the best launch stage for Lithia & Driveway in Canada,” said Christopher Pfaff, president and CEO of Pfaff Automotive Partners. “Currently, there is no country-wide, e-commerce player in Canada,
With a market cap of US $11.55 billion ($14.36 billion) — and 263 dealerships in its portfolio prior to the Pfaff offer, according to the company’s internet site — Lithia has bigger accessibility to cash for enlargement than each and every other dealership team in Canada by a extensive margin.
Lithia rated No. 3 on Automotive News’ most the latest listing of the top rated 150 dealership teams based mostly in the U.S., with retail product sales of 171,168 new motor vehicles in 2020. But with its April acquisition of 34 outlets from Michigan’s Suburban Assortment, Lithia handed Penske to turn into the country’s second-greatest dealership team.
With files from Automotive News and Automotive Information Canada.