Pendragon to sell UK auto retail business in £250m deal
Pendragon has agreed the sale of its motor and leasing business to a United States-based automotive giant.
Oregon-headquartered Lithia Motors is set to acquire the business which includes auto retail brands such as Evans Halshaw and Stratstone for £250m.
Pendragon trades from around 160 sites in the UK and represents over 20 different vehicle manufacturers.
The two companies have also agreed a strategic partnership which will see Pendragon roll out its dealer management software Pinewood to Lithia’s existing UK business of 50 sites. They will also form a joint venture to bring Pinewood to the North American market, along with a subscription by Lithia to £30m worth of Pendragon’s shares.
As a result of the transaction, Pinewood will become a standalone entity and retain Pendragon’s existing listing on the London Stock Exchange. It will henceforth operates solely as a ‘Software as a Service’ business.
Pendragon’s board believes the takeover will deliver around £240m of dividends to its shareholders.
Ian Filby, non-Executive chairman of Pendragon, said: “Pendragon has made strong progress executing its strategy in recent years and the business has been repositioned successfully as a digitally-enabled automotive retailer. Today’s announcement follows an extensive strategic review undertaken by the board of Pendragon to maximise value for our stakeholders.”
In December last year, Swedish automotive retail group Hedin announced that it had pulled out of a £400m deal to take over Pendragon.