Lithia Motors Inc., which has been on a dealership buying spree and kick-started the parade of megadeals in 2021, is not done shopping this year as it climbs towards its eventual goal of 500 U.S. stores.
After a busy third quarter in which Lithia's combined dealerships acquisitions — with purchases in Alabama, California, Texas, Georgia and international expansion via Canada's Pfaff Automotive Partners — are expected to generate annual revenue of $1.7 billion, the retailer has deals worth nearly the same amount expected to close in the fourth quarter.
"While several large deals were announced recently, the automotive retail industry remains highly fragmented and unconsolidated with the market share of the 10 largest groups at only about 10 percent," Lithia CEO Bryan DeBoer said during the company's third-quarter earnings call on Wednesday. "We have nearly $1.5 billion in annual revenue commitments as well as over $12 billion in the pipeline, which excludes our peers' large transactions."
Tom Dobry, Lithia's vice president of marketing, said the group expects the deals tallying a projected $1.5 billion in annual revenue to close before the end of 2021, pending manufacturer approvals.
Lithia said it has acquired stores representing $6.2 billion in annualized revenue through acquisitions so far in 2021.
Lithia posted $307.9 million in third-quarter net income, nearly doubling the $158.8 million it earned a year earlier. Lithia had 209 U.S. dealerships in 2020, but following the ongoing acquisition tear, the group's current store count is 265. Revenue for the Medford, Ore., retailer climbed 70 percent to $6.17 billion.
"We ended the quarter with $1.7 billion in cash and available credit, which if deployed to support network growth, could purchase up to $6.8 billion in annualized revenues," CFO Tina Miller said during the earnings call.