Lithia Motors & Driveway (LAD) Expand into Canada with Pfaff Automotive Partners

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Aug 31, 2021, 07:15 ET

MEDFORD, Ore., Aug. 31, 2021 /PRNewswire/ -- Lithia & Driveway (NYSE: LAD) announced today the company's expansion into Canada through a new partnership with Toronto-based Pfaff Automotive Partners. The transaction is LAD's first international acquisition and paves the way for growth and capital deployment beyond the 50/50 Plan's domestic network target of 500 locations. Pfaff's 11 locations in the Greater Toronto area, the largest market in Canada, as well as Vancouver and Calgary are expected to generate over $1 billion USD in annualized revenues. LAD is also acquiring Pfaff's leasing business, a complementary profit driver for Pfaff and a new adjacency for LAD to explore and build upon throughout North America.

"Canada has been our top target for growth outside of the United States with its similar business practices and a market opportunity of 5 million new and used cars sold annually," said Bryan DeBoer, LAD President and CEO. "Beyond its size, Pfaff has an excellent management team, and its locations provide an ideal hub for further expansion. Pfaff offers a customer-friendly experience with its best price first approach and captive in-house leasing option. This simple, transparent experience perfectly aligns with our technology-enabled online offerings. We warmly welcome Chris Pfaff and the entire Pfaff team to the Lithia & Driveway family."

Pfaff Automotive Partners was founded by Chris Pfaff's father Hans J. Pfaff in 1964 and has since expanded to become one of Canada's leading premium automotive group. Pfaff is widely known for its passion for all things automotive and its decades-long commitment to motorsports. The Pfaff brand will remain, and Chris Pfaff will continue to act as President and CEO.

"This partnership is borne out of a relationship that spans five years, and we are confident that the cultural alignment between our organizations makes this the perfect launch point for Lithia & Driveway in Canada," said Christopher Pfaff, President and CEO of Pfaff Automotive Partners. "Currently, there is no nation-wide, e-commerce player in Canada, which is why we believe this partnership will deliver a first-mover advantage in acquiring additional locations and deploying LAD's innovative, digital platforms across this country."

The addition of Pfaff brings LAD's total expected annualized revenue acquired in 2021 to $5.9 billion. The company is well ahead of schedule and positioned to exceed their 5-year plan to reach $50 billion in revenue and $50 of earnings per share announced in July 2020. LAD's strategic growth moves it closer to its goal of delivering and servicing consumer vehicles within a 100-mile radius anywhere in the U.S. The acquisition was financed using existing on-balance sheet capacity.

About Lithia & Driveway (LAD)

LAD is a growth company powered by people and innovation with a plan to profitably consolidate the largest retail sector in North America. As the leading provider of personal transportation solutions in North America, LAD is among the fastest-growing companies in the Fortune 500 and is currently ranked #231 (#2 on 10-Year EPS Growth, #3 on 10-Year TSR and #12 on 10-year Revenue growth in 2021). By providing a wide array of products and services for the entire vehicle ownership lifecycle through various consumer channels, LAD builds magnetic brand loyalty. Operational excellence is achieved by focusing the business on convenient and transparent consumer experiences supported by proprietary data science to improve market share, consumer loyalty and profitability. LAD's omni-channel strategy will continue to pragmatically disrupt the industry by leveraging experienced teams, vast owned inventories, technology, and physical network. LAD continues to lead the industry's consolidation, and this combined with Driveway's e-commerce in-home experiences, further accelerates the massive regenerating capital engine. Together, these endeavors create a unique and compelling high-growth strategy that provides transportation solutions wherever, whenever, and however consumers desire.

Sites:
www.lithiainvestorrelations.com
www.lithia.com
www.driveway.com
www.pfaffauto.com
www.lithiacareers.com

Lithia & Driveway on Facebook
https://www.facebook.com/LithiaMotors
https://www.facebook.com/DrivewayHQ

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https://twitter.com/LithiaMotors
https://twitter.com/DrivewayHQ

SOURCE Lithia Motors, Inc.