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Lithia buys New Jersey stores from Prestige

  • March 05, 2018
  • Jamie LeReau
  • Automotive News

Lithia Motors Inc. has bought six dealerships from Prestige Family of Fine Cars in Bergen County, N.J.

The deal is expected to generate $900 million in additional annual revenue for Lithia, which adds BMW, Mini, Mercedes, Toyota and two Lexus dealerships to its portfolio.

"These are high volume, luxury stores nicely matching one of the most affluent areas in the country," said Lithia CEO Bryan DeBoer in a statement.

Prestige owns additional dealerships that were not sold to Lithia, said buy-sell adviser Alan Haig, who represented Prestige in the transaction. Haig is president of Haig Partners in Fort Lauderdale, Fla.

The stores Prestige is keeping include a Mini store in New York, a Volkswagen store in Connecticut, a Lincoln dealership in Paramus, N.J., and a McLaren and a Lamborghini dealership, both in Ramsey, N.J., Haig wrote in an email to Automotive News.

The stores Lithia bought are in Paramus and Ramsey, N.J., near Lithia's existing DCH operations and near its Carbone stores located in the New England market.

Both coasts

Lithia, the nation's fourth-largest dealership group, now has 185 dealerships in 18 states along both coasts, the Northwest and Midwest. Its brand mix is heavy on mass-market import and domestic franchises. The addition of Prestige will diversify Lithia's brand mix in the Northeast and strengthen its luxury product offerings, DeBoer said.

Earlier this week, Lithia said it bought Day Automotive Group in suburban Pittsburgh, adding to its presence in that market. Day Automotive, in Monroeville, Pa., sells Audi, Volkswagen, Chevrolet, Ford and Subaru vehicles, according to its website. It is estimated to generate $340 million in annual revenue.

In May, Lithia acquired Pittsburgh's Baierl Auto Group in a deal estimated to provide Lithia with $500 million in additional annual revenue. Before that purchase, Lithia did not have any dealerships in Pennsylvania.

The Prestige and Day Auto Group deals, plus its purchase of Ray Laks Honda and Ray Laks Acura in Buffalo, N.Y., in January adds more than $1.3 billion in annual revenue to Lithia in the first two months of 2018.

More revenue

"As a result, we are increasing our annual outlook to a range of $12 billion to $12.5 billion in revenue," DeBoer said. The prior outlook was $11 billion to $11.5 billion.

"Day and Prestige are contributing minimally to our 2018 earnings due to their relative underperformance and incremental debt costs, but can deliver earnings similar to our core operations in the future," he said.

Lithia, of Medford, Ore., ranks No. 4 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 145,772 new vehicles in 2016.

 

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