US-based Lithia Motors set to buy Pendragon Vehicle Management

Pendragon Vehicle Management is set to be taken over by US-based Lithia Motors as part of a £280 million deal for the wider automotive business.

The leaseco was 17th in last year’s FN50 listing of the UK’s largest leasing companies, with a funded/risk car and van fleet of 13,111 vehicles.

As well as PVM, the proposal, which has been agreed by Pendragon’s plc board, subject to shareholders’ approval, would see the US company also take over its dealership business, which includes the Stratstone, Evans Halshaw and Car Store brands.

The deal leaves Pinewood, Pendragon's software division, behind as a standalone entity retaining Pendragon's stock market listing.

Its name will be changed to Pinewood Technologies plc, as a pure software as a service (SaaS) business, headed by current Pendragon chief executive Bill Berman and chief financial officer Oliver Mann.

Lithia had recently claimed the title of North America's largest motor retailer, following a spate of acquisitions, and it has 296 outlets in 26 states across the USA and Canada, representing 41 new vehicle brands.

Bryan DeBoer, chief executive of Lithia, said: "The strategic partnership with Pinewood Technologies and acquisition of Pendragon's UK motor and vehicle management divisions is a massive step in delivering on our longer-term growth strategy.

"We are excited about the great potential in Pinewood's offering and envision our strategic partnership to further expand this SaaS business globally.

"Additionally, the proposed acquisition presents a highly synergistic growth opportunity with our existing UK presence with Jardine Motors Group; provides a new adjacency with PVM; and expands our brand and geographic footprint while serving to further strengthen our existing OEM relationships."

Ian Filby, non-executive chairman of Pendragon, added: "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.

"The proposed transaction provides shareholders with an immediate dividend close to the company's undisturbed market capitalisation as well as ongoing ownership in an exciting technology company with improved growth prospects."