Lithia adds California group
Lithia Motors’ blockbuster purchase of the Downtown Los Angeles Auto Group could add as much as $1 billion in revenue for the U.S. public dealership group.
The move, announced this week, will see Lithia take over DTLA’s Audi, Mercedes-Benz, Nissan, Porsche, Toyota and Volkswagen stores located in downtown Los Angeles and a Nissan store in nearby Carson, Calif.
A release from Lithia said the company was increasing its 2017 guidance to a range of $8.55 to $8.70 per share.
“We are pleased to continue our robust acquisition cadence of purchasing strong assets with considerable upside,” said Bryan DeBoer, Lithia president and CEO.
“These stores are located in the fast-growing downtown area, within close proximity to the Staples Center and L.A. Live, and are among the largest volume stores of their brands in the nation.”
This purchase is the latest in some substantial acquisitions made by Lithia recently, started by the $364-million purchase of DCH in October, 2014.
DeBoer and his team also bought the nine-store Carbone Auto Group last fall and added the Baierl Auto Group in May for $90.2 million.
The brief press release issued this week about the DTLA purchase did not offer exact figures except to note it cost approximately half of the $300 million raised in its recent senior notes offering.
“The remaining funds from the notes offering, our free cash flow and a recently increased syndicated credit facility support our continued growth cadence. Improving performance to realize the full potential of our acquisitions achieves greenfield rates of return.”