Lithia Motors Inc., in one other transaction supporting its aggressive enlargement plan, mentioned Tuesday it acquired Canadian dealership group Pfaff Automotive Companions.

The announcement confirms the approaching deal first reported by Automotive Information in July.

Phrases of the transaction weren’t disclosed, however a Pfaff spokesman mentioned the Canadian group retains an undisclosed fairness stake within the operation.

It marks Lithia’s first worldwide acquisition and strikes the second-largest U.S. dealership group towards its aim of 500 home places. Lithia mentioned the acquisition will carry its anticipated 2021 annualized income from acquisitions to $5.9 billion. The Canadian dealerships are anticipated to generate greater than $1 billion in these annualized revenues for Lithia, headquartered in Medford, Ore. The deal was financed with “current on-balance sheet capability,” Lithia mentioned.

Pfaff, headquartered in Toronto, operates 16 dealerships throughout Canada — 11 of them within the Toronto space, the most important market within the nation. It additionally has shops in Vancouver and Calgary.

“Canada has been our prime goal for progress exterior of the US with its related enterprise practices and a market alternative of 5 million new and used automobiles bought yearly,” Lithia CEO Bryan DeBoer mentioned in a press release. “Past its dimension, Pfaff has a superb administration crew, and its places present an excellent hub for additional enlargement.”

DeBoer praised Pfaff’s best-price first method and captive in-house leasing possibility, saying Pfaff “completely aligns with our technology-enabled on-line choices.”

The acquisition of Pfaff makes Lithia the second publicly traded dealership group working within the Canadian market. AutoCanada, based mostly in Edmonton, Alta., was the only real public dealership group in Canada.

The Pfaff model will stay, and Chris Pfaff, whose father Hans based the corporate in 1964, will proceed to function president and CEO. A Pfaff spokesman mentioned the whole Pfaff administration crew will keep on board to run the model.

The deal additionally means Lithia will carry its Driveway omnichannel digital retailing platform north of the border.

DeBoer beforehand mentioned that early learnings from Driveway, rolled out one 12 months in the past, show the potential for the platform to dominate each “domestically and internationally.” 

Omnichannel refers to expertise and processes aimed toward offering a seamless shopping for expertise for customers whether or not they store on-line, in-store or each.

Pfaff CEO Chris Pfaff mentioned in a press release there presently isn’t a “nation-wide, e-commerce participant in Canada.”

“This partnership is borne out of a relationship that spans 5 years, and we’re assured that the cultural alignment between our organizations makes this the right launch level for Lithia and Driveway in Canada,” Pfaff mentioned.

With a market cap of $11.55 billion — and 263 dealerships in its portfolio previous to the Pfaff deal, based on the corporate’s web site — Lithia has higher entry to capital for enlargement than each different dealership group in Canada by a large margin.

Lithia ranked No. 3 on Automotive Information’ most up-to-date listing of the highest 150 dealership teams based mostly within the U.S., with retail gross sales of 171,168 new autos in 2020. However with its April acquisition of 34 shops from Michigan’s Suburban Assortment, Lithia handed Penske to turn out to be the nation’s second-largest dealership group.