Lithia Motors Inc., in another transaction supporting its aggressive expansion plan, said on Tuesday it had acquired Canadian dealer group Pfaff Automotive Partners.
The announcement confirms the impending deal first reported by Automotive News in July.
Terms of the deal were not disclosed, but a spokesperson for Pfaff said the Canadian group retains an undisclosed stake in the deal. The deal was concluded on Monday.
This is the first international acquisition of Lithia, the second largest US dealer group also targeting a target of 500 national locations. Lithia said the acquisition would bring expected annualized acquisition revenue to $ 5.9 billion for 2021. Canadian dealers are expected to generate more than $ 1 billion for Lithia, headquartered in Medford, in. Oregon. The deal was funded with “the existing capacity on the balance sheet,” Lithia said.
Pfaff, headquartered in Toronto, operates 16 dealerships across Canada, including 11 in the Toronto area, the country’s largest market. It also has stores in Vancouver, British Columbia, and Calgary, Alberta. Pfaff’s Mercedes-Benz and Harley-Davidson dealers were not part of the acquisition.
“Canada has been our primary growth target outside of the United States with its similar business practices and a market opportunity of five million new and used cars sold each year,” Lithia CEO Bryan DeBoer said in a statement. “Beyond its size, Pfaff has an excellent management team and its locations provide an ideal hub for future expansion.”
DeBoer praised Pfaff’s best price first approach and captive in-house rental option, saying Pfaff “aligns perfectly with our technology-based online offerings.”
The acquisition of Pfaff makes Lithia the second largest publicly traded dealer group operating in Canada. AutoCanada, based in Edmonton, Alberta, was the only public dealer group in the country.
The Pfaff brand will remain and Chris Pfaff, whose father, Hans, founded the company in 1964, will continue as President and CEO. A spokesperson for Pfaff said the entire management team will remain on board to lead the brand.
The deal also means Lithia will bring its Driveway omnichannel digital retail platform north of the border.
DeBoer previously said that Driveway’s first learnings, rolled out a year ago, demonstrated the platform’s potential to dominate both “nationally and internationally.”
Omnichannel refers to the technology and processes aimed at providing a seamless shopping experience for consumers, whether they buy online, in-store, or both.