Canadian dealership team Pfaff Automotive Companions, of Toronto, has been acquired by U.S.-centered Lithia Motors, confirming news of the imminent deal first described by Automotive Information Canada in July.
Money conditions of the transaction made public Tuesday have been not disclosed. But, a Pfaff spokesman said the Canadian group retains an undisclosed equity stake in the procedure, noting Lithia owns the the greater part stake.
It marks Lithia’s to start with global acquisition as the next-largest U.S. dealership team also targets a purpose of 500 domestic areas.
Pfaff, headquartered in Toronto, operates 16 dealerships across Canada — 11 of them in the Larger Toronto Area, the largest current market in the region. It also has retailers in Vancouver and Calgary. The Canadian dealerships are anticipated to make more than US$1 billion in annualized revenues for Lithia, headquartered in Medford, Ore.
“Canada has been our top concentrate on for growth outdoors of the United States with its related small business methods and a marketplace chance of five million new and utilised cars offered every year,” Lithia CEO Bryan DeBoer reported in a statement. “Over and above its dimension, Pfaff has an outstanding management crew, and its destinations provide an perfect hub for even more enlargement.”
DeBoer praised Pfaff’s best-value initial tactic and captive in-property leasing possibility, indicating Pfaff “perfectly aligns with our technology-enabled on the net choices.”
The acquisition of Pfaff would make Lithia the second publicly traded dealership team functioning in the Canadian industry. AutoCanada, centered in Edmonton, Alta., was the sole general public dealership group in Canada.
The Pfaff model will continue to be, and Chris Pfaff, whose father Hans established the organization in 1964, will go on to provide as president and CEO. A Pfaff spokesman mentioned the whole Pfaff administration group will keep on board to operate the brand name.
The offer also suggests Lithia will bring its Driveway omnichannel digital retailing system north of the border.
DeBoer previously claimed that early learnings from Driveway, rolled out one particular calendar year back, exhibit the probable for the platform to dominate both of those “domestically and internationally.”
Omnichannel refers to technological know-how and processes aimed at furnishing a seamless acquiring practical experience for buyers whether or not they shop on-line, in-store or each.
Pfaff mentioned in a statement there at the moment isn’t a “nation-broad, e-commerce participant in Canada.”
“[W]hich is why we think this partnership will supply a to start with-mover benefit in buying added spots and deploying [Lithia’s] modern, digital platforms across this nation,” Pfaff stated. “This partnership is borne out of a relationship that spans five decades, and we are self-assured that the cultural alignment between our businesses makes this the best launch level for Lithia & Driveway in Canada,” said Christopher Pfaff, president and CEO of Pfaff Automotive Associates. “Currently, there is no country-vast, e-commerce player in Canada,
With a industry cap of US $11.55 billion ($14.36 billion) — and 263 dealerships in its portfolio prior to the Pfaff offer, in accordance to the company’s site — Lithia has better access to money for enlargement than each and every other dealership group in Canada by a huge margin.
Lithia rated No. 3 on Automotive News’ most recent list of the major 150 dealership teams primarily based in the U.S., with retail product sales of 171,168 new cars in 2020. But with its April acquisition of 34 retailers from Michigan’s Suburban Assortment, Lithia passed Penske to turn into the country’s 2nd-largest dealership group.
With data files from Automotive News and Automotive Information Canada.