Lithia & Driveway Expands in North Central Region with the Purchase of Carousel Motor Group

Rhea-AI Summary

Lithia & Driveway (NYSE: LAD) expands its presence in the North Central Region by acquiring Carousel Motor Group, adding over $900 million in annualized revenue. The purchase includes nine stores with premium luxury and domestic brands, strengthening LAD's market position in Minneapolis-St. Paul. This acquisition, along with previous purchases, boosts LAD's total expected annualized revenue to $5.4 billion year-to-date.

Insights

Market Research Analyst

The acquisition of Carousel Motor Group by Lithia & Driveway (LAD) represents a strategic expansion in the automotive retail sector. By entering the Minneapolis-St. Paul market, LAD is tapping into a significant consumer base in the North Central Region. The projection of over $900 million in annualized revenue from this acquisition is a substantial increase in LAD's revenue stream and indicates a bullish outlook for the company's growth trajectory.

In terms of market dynamics, this move could potentially increase LAD's market share and bargaining power with manufacturers due to the addition of premium luxury brands. This expansion is also an example of consolidation within the automotive retail industry, which could lead to economies of scale and improved operational efficiencies for LAD. Investors should note the potential for increased earnings per share and stronger financial performance in upcoming quarters as the acquisition is integrated into LAD's existing operations.

Financial Analyst

From a financial perspective, the financing of the Carousel Motor Group acquisition using existing on-balance sheet capacity suggests that Lithia & Driveway has a solid financial position with sufficient liquidity. This approach to financing minimizes the immediate need for external borrowing, which can be favorable in terms of controlling interest expenses and preserving credit ratings.

With the year-to-date expected annualized revenue from acquisitions surpassing $5.4 billion, stakeholders should consider the implications of such aggressive growth on the company's balance sheet and cash flows. While the short-term impact appears positive, it is crucial to monitor the long-term return on investment and debt levels to ensure sustainable growth.

Investors may also want to look for synergies between Carousel Motor Group and LAD's existing operations. Effective integration could lead to cost savings and revenue enhancement opportunities, thereby improving the overall financial health of the company.

MEDFORD, Ore., Feb. 27, 2024 /PRNewswire/ -- Lithia & Driveway (NYSE: LAD) announced today they have purchased Carousel Motor Group, growing their footprint in one of the largest markets in the North Central Region, Minneapolis-St. Paul. The group, comprised mainly of premium luxury brands, is projected to generate more than $900 million in annualized revenue.

"We are excited to expand into the Twin Cities with Carousel Motor Group and its successful award-winning stores," said Bryan DeBoer, Lithia & Driveway President and CEO. "Building out our network in the North Central Region, our least-dense region, allows us to foster long-term customer relationships and provide our omni-channel solutions, offering a full ownership lifecycle to this market. We welcome Carousel's high-performing team members to the Lithia & Driveway family."

The group comprises nine stores, both premier luxury and domestic brands, and is in the greater Twin Cities. Carousel Hudson Ford is one of the largest locations in Wisconsin and LAD's first Ford store in the state. This location adds more brand offerings to LAD's already existing footprint after purchasing Wilde Automotive Group in October 2022.

These additions bring Lithia & Driveway's total year-to-date expected annualized revenue acquired to over $5.4 billion. The acquisition was financed using existing on-balance sheet capacity.

About Lithia & Driveway (LAD)

Lithia & Driveway (NYSE: LAD) is one of the largest global automotive retailers providing a wide array of products and services throughout the vehicle ownership lifecycle. Simple, convenient, and transparent experiences are offered through our comprehensive network of physical locations, ecommerce platforms, captive finance solutions and other synergistic adjacencies. We deliver consistent, low-risk, and profitable growth in a massive and unsolicited industry. Our highly diversified and competitively differentiated design provides us the flexibility and scale to pursue our vision to modernize personal transportation solutions wherever, whenever, and however consumers desire.

Sites
www.lithia.com
www.investors.lithiadriveway.com
www.lithiacareers.com
www.driveway.com
www.greencars.com
www.drivewayfinancecorp.com

Lithia & Driveway on Facebook
https://www.facebook.com/LithiaMotors
https://www.facebook.com/DrivewayHQ

Lithia & Driveway on Twitter
https://twitter.com/lithiamotors
https://twitter.com/DrivewayHQ
https://twitter.com/GreenCarsHQ

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SOURCE Lithia Motors, Inc.

FAQ

What did Lithia & Driveway announce regarding Carousel Motor Group?

Lithia & Driveway announced the purchase of Carousel Motor Group, expanding their presence in Minneapolis-St. Paul.

How many stores are included in the Carousel Motor Group acquisition?

The acquisition includes nine stores with premium luxury and domestic brands.

What is the expected annualized revenue from the Carousel Motor Group acquisition?

The acquisition is projected to generate more than $900 million in annualized revenue.

How does the acquisition impact Lithia & Driveway's total expected annualized revenue?

The acquisition, along with previous purchases, increases Lithia & Driveway's total expected annualized revenue to over $5.4 billion year-to-date.

How was the acquisition financed?

The acquisition was financed using existing on-balance sheet capacity.