Boston, MA 06/19/2014 (wallstreetpr) – Lithia Motors Inc (NYSE:LAD) announced on June 15, 2014 that it has decided to buy DCH Auto Group Inc for $362.5 million. It, therefore, offered the automotive retailer an existence in the Eastern U.S. for the first time.
The Portfolio Of DCH Auto Group
DCH Auto Group’s 27 dealerships sell fresh and second-hand automobiles in Southern California, New Jersey as well as New York. In a press release, Lithia Motors Inc (NYSE:LAD) stated that the acquisition is expected to escalate its earnings this year by around 12 cents to 14 cents on every share, leaving out acquisition costs. 2014 earnings of Lithia are also expected to increase by 65 cents to 75 cents on annualized basis, added the automotive retailer.
Lithia To Acquire 100% Of DCH’s Shares
Lithia Motors Inc (NYSE:LAD), the Oregon based company, claims to be the eight largest automotive retailer in the U.S. With 101 stores, the company is expected to acquire 100% of outstanding shares of DCH Auto Group. The transaction will be worth of $22.5 million in shares and $340 million in cash. Furthermore, the automotive retailer had a market worth of $2 billion as per the closing of trading on Friday. In addition, Lithia also has 101 stores located in the Western United States.
CEO Of Lithia Commented
Bryan DeBoer, the Chief Executive Officer and President of Lithia Motors Inc (NYSE:LAD), remarked that for the last several years, the company has been in quest for a strategic associate to assist Lithia to make an entry in the Eastern United States.
The Transaction Will Complete In The 4Q2014
The acquisition is assumed to conclude in the 4Q2014 and is also contingent upon customary approvals. It has been reported that DCH stores will retain their name and the present management group with George Liang, DCH President to report to the CEO. According to DCH’s statement, Shau-wai Lam, the DCH founder, is likely to join the board of Lithia Motors Inc (NYSE:LAD) after the transaction gets over.
