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ar dealership firm Pendragon will sell its UK motor business, including brands such as CarStore and Stratsone, as it focuses on its dealership management technology instead.
US giant Lithia, with annual revenues of more than $20 billion, will buy Pendragon’s dealerships for £250 million, of which £240 million will be returned to shareholders.
Pendragon will then change its name to Pinewood, the name of its dealer management software business, and start a joint venture with Lithia to roll out Pinewood across the “highly attractive” North American market.
Pendragon CEO Bill Berman said: “Pendragon has built one of the UK’s leading automotive retailing businesses, underpinned by a market leading dealer management system, the quality of our people, long-standing relationships with OEMs and excellent execution for customers.
“The Pendragon Board considers Lithia to be perfectly placed to build on this progress.
“The launch of Pinewood as a standalone company is a unique and exciting opportunity to create a best-in-class product for customers, which we can market globally and drive substantial value for our shareholders and in Lithia we have the perfect partner to help accelerate Pinewood’s push into the hugely attractive North American DMS market.”
Shares in Pendragon surged by 25% on the back of the deal, to 23.1p, valuing the entire business at £322 million.
The deal will still need approval from Pendragon shareholders.
Pendragon had been approached by Swedish motor company Hedin Group last September with a possible takeover offer worth £400 million, or 29p per share, but it did not result in a sale.
Andres Hedin, who owns the Hedin Group, still owns more than a quarter of Pendragon shares.
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