Pendragon businesses set to be sold in mega deal

Two arms of Pendragon, the Nottingham-based car retail giant, look set to be sold in a deal totalling £280m.

Further to a vote by Pendragon shareholders, the firm’s motor and leasing businesses will be been sold to Lithia UK Holding Limited, a subsidiary of Lithia Motors.

Pendragon and Lithia Motors have also agreed the terms of a strategic partnership with Lithia, including the rollout of Pinewood, the company’s dealer management software (DMS)  business, to Lithia’s existing 50 UK sites and the creation of a joint venture to accelerate Pinewood’s entry into the North American DMS market

Pinewood will become a standalone entity, retaining Pendragon’s existing listing on the London Stock Exchange. Pendragon will change its name to Pinewood Technologies and be led by Bill Berman as CEO and Oliver Mann as CFO.

Shareholders will receive around 27.4p for every share they hold as part of the deal.

Lithia is one of the largest automotive retailers in North America. It has 50 UK locations.

Pendragon operates the Stratstone and Evans Halshaw outlets

Bill Berman, chief executive of Pendragon, 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.”

Bryan DeBoer, chief executive of Lithia, added: “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.”